(3.3) Norway is one of the most important European producers of crude oil and gas. The available overall resource stock

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3 3 Norway Is One Of The Most Important European Producers Of Crude Oil And Gas The Available Overall Resource Stock 1 (100.65 KiB) Viewed 36 times

(3.3) Norway is one of the most important European producers of crude oil and gas. The available overall resource stock in the Norwegian continental shelf is estimated at around 15,864 million standard cubic meters of oil equivalents (scm oe, as of December 2021). A total of 232.79 million scm oe has been extracted from Norwegian oil fields in 2021. During the multiple choice exam you will not be required to substantiate your answers by explanations. 2See the appendices of the Blanchard book (pp. A-1, A-2, A-3): Macro APPENDICES 1-3.pdf Note that Blanchard uses the term personal disposable income instead of disposable personal income. 3Note that in the downloaded table NNP is referred to as net national income (NNI). ECON 2: Macroeconomics Exercise Sheet-3 -1- (a) In how many years will the oil and gas resources contained in the Norwegian fields be exhausted under the assumption of a constant production at the level of 2021? (b) Show that for a real number c H 1 the geometric sum is calculated by : 71 1 - 1 1-c j=0 Hint: Take the above equality as a starting point, multiply both sides by (1-c) and "see what happens" on the left hand side, i.e., in -o0(1-c). (c) Discuss why for c < 1, as n tends to infinity, the geometric sum leads to a convergent geometric series, with: OXO = أم lim 200 j=0 ca -0 1-c (d) Assume that Norwegian oil and gas production is reduced by 2% every year starting in 2022, compared to the 2021 level. After how many years will the resources be exhausted? (e) Assume now that Norwegian oil and gas production is reduced by 5% rather than 2% every year starting in 2022, and that the Norwegian parliament has decided to stop the oil and gas production after 30 years. How many standard cubic meters of oil equivalents would be extracted in total?