Harry, a Wheat Farmer, Is Deciding Whether or Not to Add

question 158

Multiple Choice

Harry, a wheat farmer, is deciding whether or not to add fertilizer to his crops. If he adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, Harry should add fertilizer if it costs less than

• A) $12.50 per pound.
• B) $20 per pound.
• C) $80 per pound.
• D) $100 per pound.

---

Definitions:

Poor Credit Ratings

A low assessment of a borrower's creditworthiness, typically reflecting a higher risk of default on loan repayments.

Risky Investments

Investments that carry a high degree of risk, potentially leading to loss of principal, but also offering the chance of higher returns.

Store Rents

The cost charged for leasing retail space in buildings or shopping centers, which can vary widely depending on location, size, and market demand.

Expensive Neighborhoods

Areas or localities where the cost of living, including housing, is significantly higher than the average.