|Question||The benefit of cutting down a forest is $1 million now. The environmental cost of that harvest is $10/year forever.
(a) At a 0 percent are the benefits of harvesting greater than the costs? Why or why not?
(b) The private market is 4 percent, but the government has decided to use a social of 0 percent. What is the associated with using the social in this situation? Explain.