A Farmer Is Deciding Whether or Not to Add Fertiliser

question 62

Multiple Choice

A farmer is deciding whether or not to add fertiliser to his or her crops. If the farmer adds 1 kilogram of fertiliser per hectare, the value of the resulting crops rises from $80 to $100 per hectare. According to marginal analysis, the farmer should add fertiliser if it costs less than:

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

---

Definitions:

Individual Retirement Account

A financial tool that provides tax advantages for retirement savings in the United States.

Exempt

Freed or relieved from a duty, requirement, or liability to which others are subject.

Security Interest

A legal claim or encumbrance on property or assets, securing the payment of a debt or performance of some other obligation.

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay.