A small farmer produces two types of crops, A and B. A and B generate $30 and $25 per bushel respectively. The crops vary in the mount of resources required to produce them as shown in the table below: Resource Crop A Crop B Units Available Land 60 Water 80 Fertilizer 3 60 Labor 1 40 A) What is the maximum profit, and how much of each crop should be produced?

Microeconomics: Private and Public Choice (MindTap Course List)
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ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter3: Demand, Supply, And The Market Process
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A small farmer produces two types of crops, A and B. A and B generate $30 and $25 per bushel
respectively. The crops vary in the mount of resources required to produce them as shown in the table
below:
Units Available
Resource
Crop A
Crop B
Land
60
Water
2
80
Fertilizer
3
60
Labor
1
40
A) What is the maximum profit, and how much of each crop should be produced?
B) What allocation of resources will maximize the farmer's profit?
C) Use shadow price analysis to determine what additional resources the farmer should seek?
Transcribed Image Text:A small farmer produces two types of crops, A and B. A and B generate $30 and $25 per bushel respectively. The crops vary in the mount of resources required to produce them as shown in the table below: Units Available Resource Crop A Crop B Land 60 Water 2 80 Fertilizer 3 60 Labor 1 40 A) What is the maximum profit, and how much of each crop should be produced? B) What allocation of resources will maximize the farmer's profit? C) Use shadow price analysis to determine what additional resources the farmer should seek?
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