A farmer can grow wheat or corn. The unit profits for a bushel of each are the same. To grow wheat (W) and corn (C), the farmer requires four input factors: Capital (K), land (L), A-Fertilizer (A), and B-fertilizer (B). The production of one bushel of corn requires two units of capital and the production of one unit of wheat four units of capital. The farmer has 32 units of capital available. The production of one bushel of corn requires two units of land and the production of one unit of wheat one unit of land. The farmer has 20 units of land available. The production of one bushel of corn requires two units of A-Fertilizer, and no B-fertilizer. The farmer has 18 units A-Fertilizer available. The production of one bushel of wheat requires one unit of B fertilizer, and no A-fertilizer. The farmer has 6 units of B-Fertilizer available. The farmer wants to maximize profits. 1: Assume, holding everything else constant, that the unit-profit for a bushel of wheat is now twice as high as the unit-profit for a bushel of corn, which statement is then true? a Corn = 8 and Wheat = 4 is an optimum solution b Corn = 6 and Wheat = 5 is an optimum solution c Corn = 4 and Wheat = 6 is an optimum solution d All of the above are true. 2: Assume, holding everything else constant, that the unit-profit for a bushel of wheat is now three times as high as the unit-profit for a bushel of corn, which statement is then true? a Corn = 8 and Wheat = 4 is an optimum solution b Corn = 6 and Wheat = 5 is an optimum solution c Corn = 4 and Wheat = 6 is an optimum solution d All of the above are true.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A farmer can grow wheat or corn. The unit profits for a bushel of each are the same. To grow wheat (W) and corn (C), the farmer requires four input factors: Capital (K), land (L), A-Fertilizer (A), and B-fertilizer (B).

The production of one bushel of corn requires two units of capital and the production of one unit of wheat four units of capital. The farmer has 32 units of capital available.
The production of one bushel of corn requires two units of land and the production of one unit of wheat one unit of land. The farmer has 20 units of land available.
The production of one bushel of corn requires two units of A-Fertilizer, and no B-fertilizer. The farmer has 18 units A-Fertilizer available.
The production of one bushel of wheat requires one unit of B fertilizer, and no A-fertilizer. The farmer has 6 units of B-Fertilizer available.

The farmer wants to maximize profits.

1: Assume, holding everything else constant, that the unit-profit for a bushel of wheat is now twice as high as the unit-profit for a bushel of corn, which statement is then true?

a	Corn = 8 and Wheat = 4 is an optimum solution
b	Corn = 6 and Wheat = 5 is an optimum solution
c	Corn = 4 and Wheat = 6 is an optimum solution
d	All of the above are true.

2: Assume, holding everything else constant, that the unit-profit for a bushel of wheat is now three times as high as the unit-profit for a bushel of corn, which statement is then true?

a	Corn = 8 and Wheat = 4 is an optimum solution
b	Corn = 6 and Wheat = 5 is an optimum solution
c	Corn = 4 and Wheat = 6 is an optimum solution
d	All of the above are true.

Bushels of Com (C)
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ing m NA
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- Bushels of Wheat (W)

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