Imagine you have a farm with three plots of land. There is one in the valley,...

Imagine you have a farm with three plots of land. There is one in the valley, one on the hill and one in the swamp. Each plot can either grow corn or wheat. Assume that planting, harvesting, etc. is free. The quantity of each crop on each plot is given by the following table.

Plot Corn Wheat

Valley 200 300

Hill 150 450

Swamp 100 100

a. Draw a PPF for your farm. Indicate all slopes and intercepts.

b. If the price of corn is $5/unit and the price of wheat is $2/unit, what should you produce on each plot in order to maximize revenue? (We haven't said the word "revenue" yet but it means the total market value of the crops.)

c. If the price of corn is $2.50 and the price of wheat is $2, what do you want to produce on each plot?

Expert Solution

a. production possibility frontier is the different combinations in which the two crops can be produced. For instance, Corn in Plot and Valley and Wheat in Swamp, and so on. Let's tabulate them and then plot the PPF.

Corn in	Wheat in	Qty of Corn	Qty of Wheat
All 3	None	450	0
Valley, Hill	Swamp	350	100
Valley	Hill, Swamp	200	550
Hill	Valley, Swamp	150	400
Swamp	Valley, Hill	100	750
None	All 3	0	850

b. Pls see table below

					Qty * Price	Qty * Price
Plot	Quantity of Corn	Quantity of Wheat	Price of Corn	Price of Wheat	Revenue from Corn	Revenue from Wheat	Higher of the two	We will produce
Valley	200	300	5	2	1000	600	1000	Corn
Hill	150	450	5	2	750	900	900	Wheat
Swamp	100	100	5	2	500	200	500	Corn

c. Pls see table below

					Qty * Price	Qty * Price
Plot	Quantity of Corn	Quantity of Wheat	Price of Corn	Price of Wheat	Revenue from Corn	Revenue from Wheat	Higher of the two	We will produce
Valley	200	300	2.5	2	500	600	600	Wheat
Hill	150	450	2.5	2	375	900	900	Wheat
Swamp	100	100	2.5	2	250	200	250	Corn

Rahul Sunny answered 1 year ago

Sean Willens owns various plots of land in Duval County, FL. He acquired the land at...

Sean Willens owns various plots of land in Duval County, FL. He acquired the land at various times during the last 20 years. About every third year, Sean subdivides one of the properties he owns into lots. He then has sewer, water, natural gas, and electricity hookups put in each lot and paves new streets. Sean has always treated his sales of such lots as sales of capital assets. His previous tax returns were prepared by an accountant whose practice...

Imagine that you are forming a partnership with two other partners. All three of you have...

Imagine that you are forming a partnership with two other partners. All three of you have cash to invest in the business as well as skills to contribute. Two of your partners will provide services, along with investing cash. Are there any details you think should be included in the partnership agreement? What disadvantages should you be aware of when forming a partnership? How will you allocate income or loss? Will you also include a salary allowance for the partners...

Imagine that you are one of three partners in an accounting firm. Five years ago, the...

Imagine that you are one of three partners in an accounting firm. Five years ago, the firm was appointed as external accountants to a successful startup company, engaged to prepare year end accounts and tax returns. The startup had begun trading with a handful of employees but now has a workforce of 200, while still remaining below the size of company requiring a statutory audit. Due to your close relationship with the director/owner of the company and several of its...

Imagine that you have the DNA sequences from the intron of a gene in three species...

Imagine that you have the DNA sequences from the intron of a gene in three species called A, B, and C. Species A and B are most closely related, while C is more distantly related. The sequences of A and B differ by 18 base pairs, A and C differ by 26 base pairs, and B and C differ by 28 base pairs. Fossils show that species A and B diverged about 1.2 Mya, but there is no fossil evidence...

37. Relative to automobiles, farm land would tend to have a moresupply a) Elastic b) Inelastic...

37. Relative to automobiles, farm land would tend to have a moresupply a) Elastic b) Inelastic c) Unit elastic d) Responsive e) None of the above 38. Suppose that an increase in the price of carrots from $1.20 to $1.40 per pound raises the amount of carrots that carrot farmers produce from 1.2 million pounds to 1.6 million pounds. The elasticity of supply is: a) 0.54 b) 0.50 c) 2.00 d) 1.86 39. Which of these is not a topic...

Imagine you have two beakers: one with 750 ml of sea water and one with 750...

Imagine you have two beakers: one with 750 ml of sea water and one with 750 ml of distilled water. You bubble CO2 into each and take the pH of each solution every minute for 15 minutes. Q1: Why did pH decrease when CO2 was added to water and sea water? Q2: Why did the pH of the water decrease more quickly than the sea water? Explain how the buffer system in our blood is related to ocean acidification. According...

Imagine you have a plasmid and you cut it with three different restriction enzymes (enzymes 1,...

Imagine you have a plasmid and you cut it with three different restriction enzymes (enzymes 1, 2, 3). You then run these fragments through a gel and get this separation. Label the positive and negative terminals on this gel with a (+) and (-) sign. If you were working with a single plasmid, how many cut sites did restriction enzyme 1 have? Explain? When creating a gel, we stain it with Ethidium Bromide or Gel Red. What is the purpose...

Imagine you have two solutions, one that is 0.113 M in HCl and the other that...

Imagine you have two solutions, one that is 0.113 M in HCl and the other that is 0.085 M in Sr(OH)2. If you add 37.4 mL of the HCl solution to 31.8 mL of the Sr(OH)2 solution, which is the limiting reactant? How many grams of SrCl2 will be formed? How many moles of the excess reagent remain in solution?

Imagine you have the option to invest in three different opportunities: A, B and C. Let's...

Imagine you have the option to invest in three different opportunities: A, B and C. Let's also say that you have analyzed the risks and you believe you can classify them as low-risk, medium-risk and high-risk, respectively. Which of these three opportunities would you need to provide the greatest return in order to invest in it? Now let's say the returns of opportunities A and B are highly correlated with the market as a whole but those of opportunity C...

Assume there are two plots of vineyard land, X and Y. If X costs twice as...

Assume there are two plots of vineyard land, X and Y. If X costs twice as much as Y and rents and discount rates are the same for each plot, the price difference can only be causes by different growth rates. a) For both plots, provide an abstract equation for the growth rate g. Assume that plot Y’s price is NPV. b) Based on your answer to (a), and assuming that the price-to-rent ratio for plot Y equals 12 and...

Question