Suppose That You Own Two Farms on Which to Grow

question 16

Multiple Choice

Suppose that you own two farms on which to grow corn. Inorder to lower the cost of production, you determine toincrease production on Farm 1 and reduce it on Farm 2. Thisimplies that the marginal cost of production on Farm 1 is:

• A)greater than the marginal cost of production on Farm 2.
• B)less than the marginal cost of production on Farm 2.(True Answer )Correct
• C)equal to the marginal cost of production on Farm 2.
• D)The difference of the marginal costs between the two farms cannot be determined.