Consider Two Farms

question 102

Multiple Choice

Consider two farms. Farm 1 produces the first bushel for $5 each, but the marginal cost rises gradually as the quantity increases. Farm 2 produces the first bushel for $7, but marginal cost also rises gradually as the quantity increases. With a market price of $10 a bushel, how should production be allocated between these two farms?

• A) Produce on both farms until the marginal cost on each farm rises to $7.
• B) Produce on both farms until the marginal cost on each farm rises to $10.
• C) Produce all bushels on Farm 1.
• D) Produce all bushels on Farm 2.

---

Definitions:

Suicide Rate

The number of suicides occurring among a specific population group during a certain period of time.

European Americans

Individuals in the United States who identify with or are descended from European ancestry.

Native Americans

Indigenous peoples of the United States, including Alaska Natives, Native Hawaiians, and other Pacific Islanders.

Cognitive-Behavioral Therapy

A type of psychotherapeutic treatment that helps patients understand the thoughts and feelings that influence behaviors, focusing on changing negative thought patterns.