Suppose that you own a 20-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. Instructions: Enter your answers as a whole number. a. If the price at which wheat can be sold is $6 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 20 acres? $ b. What price would the farmer pay to rent your 20 acres if the price of wheat rises to $7 per bushel? 2$

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Suppose that you own a 20-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves
$30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will
yield 40 bushels of wheat per acre.
Instructions: Enter your answers as a whole number.
a. If the price at which wheat can be sold is $6 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most
that any farmer would pay to rent your 20 acres?
2$
b. What price would the farmer pay to rent your 20 acres if the price of wheat rises to $7 per bushel?
2$
Transcribed Image Text:Suppose that you own a 20-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. Instructions: Enter your answers as a whole number. a. If the price at which wheat can be sold is $6 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 20 acres? 2$ b. What price would the farmer pay to rent your 20 acres if the price of wheat rises to $7 per bushel? 2$
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