Scenario 12-15
Farmer Jack is a watermelon farmer.If Jack plants no seeds on his farm,he gets no harvest.If he plants 1 bag of seeds,he gets 30 watermelons.If he plants 2 bags of seeds,he gets 50 watermelons.If he plants 3 bags of seeds he gets 60 watermelons.A bag of seeds costs $100,and the costs of seeds are his only costs.
-Refer to Scenario 12-15.Farmer Jack's marginal cost (i)curve is U-shaped.
(ii)decreases with increased watermelon output.
(iii)reflects diminishing marginal product.

Question

Quizplus · Accepted Answer

The marginal cost curve reflects the additional cost of producing each additional unit of output. In this scenario, the only cost is the cost of seeds. Since each additional bag of seeds leads to a smaller increase in the watermelon output (from 30 to 50 to 60), the marginal product of seeds is diminishing. Therefore, the marginal cost curve reflects the diminishing marginal product, which is only represented by option (iii). The shape of the marginal cost curve is not provided in the scenario, so options (i) and (ii) cannot be confirmed.

Scenario 12-15 Farmer Jack Is a Watermelon Farmer.If Jack Plants No Seeds