Question

Resource Limit Corn Beans Land   800 1 1 capital   90000 150 100 labor 3500 5 2.5...

Resource Limit Corn Beans

Land   800 1 1

capital   90000 150 100

labor 3500 5 2.5

Gross margin   100 80

A- If this farmer plants only corn, how much profit will they have?

B- If this farmer only plants beans, how much profit do they have?

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Answer #1

A) If the farmer decides to plant only corn, the quantity of corn that can be produced on the given land =

= 800/1 = 800

The quantity of corn that can be produced on the given capital = 90000/150 = 600

The quantity of corn that can be produced from the given labor = 3500 / 5 = 700

So, the maximum amount of corn that can be produced is 600 units.

So, the profit from producing 600 units of corn is 600*100 = 60000.

B) If the farmer decides to plant only beans, the quantity of beans that can be produced on the given land =

= 800/1 = 800

The quantity of beans that can be produced on the given capital = 90000/100 = 900

The quantity of beans that can be produced from the given labor = 3500 / 2.5 = 1400

So, the maximum amount of beans that can be produced is 800 units.

So, the profit from producing 800 units of corn is 800*80 = 6400.

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