A purely competitive wheat farmer can sell any wheat he grows for $25 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on.
a. Use the table below to answer the following questions. How many bushels will each of the farmer’s five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre?
Instructions: Enter your answers as whole numbers.
b. If the marginal cost of planting and harvesting an acre is $20,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres.
Answer:
A)
B. Three acres at maximuM. as after that MC will be higher than MR.
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(I) Historically, countries with colonial settlers who planned on staying for long periods of time set up sound economic institutions. (II) Countries with harsh environments not suitable for permanent settlements resulted in colonial settlers adopting weaker and less productive economic institutions before leaving
a. I is true; II is false.
b. I is false; II is true.
c. Both I and II are true.
d. Both I and II are false.
If the marginal propensity to consume, MPC, is less than 1 and a household's disposable income increases by $2,000, the household's consumption will _____
a. increase by less than $2,000 b. increase by $2,000 c. decrease if the total income of the household is above $100,000 d. remain the same unless the change in income significantly affects the household's wealth e. increase by more than $2,000
According to the graph above, which of the following will occur if a legal price ceiling is imposed at price X?
What will be an ideal response?
Suppose Panama produces only two goods, bananas and hats. If Panama has a comparative advantage in bananas, a move toward free trade will:
A. harm hat workers, benefit banana workers, but benefit the nation as a whole. B. harm hat workers, harm banana workers, but benefit the nation as a whole. C. benefit hat workers, harm banana workers, but harm the nation as a whole. D. benefit hat workers, harm banana workers, but benefit the nation as a whole.