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Suppose That You Own Two Farms on Which to Grow

Question 5

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.

Correct Answer:

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