Farmer Jones Knows That the Marginal Cost to Produce a Bushel

question 425

Multiple Choice

Farmer Jones knows that the marginal cost to produce a bushel of tomatoes is $5 per bushel. He also knows that a consumer is willing to pay a maximum of $9 for the bushel. The price of the bushel is $6 and Farmer Jones sells his bushel for $6. On this bushel, Farmer Jones earns a producer surplus equal to

• A) $1.
• B) $3.
• C) $5.
• D) $6.

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Definitions:

Positive Consequences

Outcomes or results of an action that are beneficial or desirable, encouraging the repetition of the behavior that led to them.

Positive Reinforcement

A method of strengthening desired behavior by offering motivating incentives or rewards when the behavior is exhibited.

Extinction

A reinforcement contingency in which a behavior is followed by the absence of any consequence, thereby reducing the likelihood that the behavior will be repeated in the same or similar situations.

Negative Reinforcement

A type of conditioning where an undesirable outcome or event is removed following a behavior, increasing the likelihood of that behavior's occurrence in the future.