Currently, a Farmer Can Either Grow 40 Bushels of Wheat

question 4

Multiple Choice

Currently, a farmer can either grow 40 bushels of wheat or 120 bushels of corn per acre. If he were able to trade 70 bushels of corn for 30 bushels of wheat, would he be better off or worse off?

• A) worse off, because his opportunity cost of wheat would increase from 2.33 bushels of corn to 3 bushels of corn
• B) better off, because his opportunity cost of wheat would fall from 80 bushels to 50 bushels
• C) better off, because his opportunity cost of wheat would fall from 3 bushels of corn to 2.33 bushels
• D) worse off, because his opportunity cost of wheat would increase from 50 bushels of corn to 80 bushels of corn

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Definitions:

Common Measures Bias

A bias that occurs when survey respondents use common scales to make their answers seem more socially acceptable or favorable.

Cognitive Bias

A systematic pattern of deviation from norm or rationality in judgment, whereby conclusions about other people and situations may be drawn in an illogical fashion.

Performance of Divisions

Evaluation of each segment or department within a company based on their financial results, productivity, and efficiency.

Cognitive Bias

An organized tendency to deviate from normal or logical thinking in making judgments, leading to conclusions about people and situations that are drawn illogically.