If you heard overheard a farmer discussing his planting plans for the upcoming season and he said "The price of corn has gone way up. I know I'll have to put some money into fertilizer on that field on the hill that's been idle all these years, but it will be worth it this year." This would be consistent with which justification for an upward sloping supply curve

Question

Quizplus · Accepted Answer

The statement about needing to put money into fertilizer suggests that the farmer is experiencing increasing marginal cost, as it will require more resources to produce the same amount of output on the previously idle field. Additionally, the fact that the farmer sees this as worth it due to the higher price of corn suggests that he is motivated to produce more due to the need for higher prices in one good to motivate a shift in production from another. However, this statement does not necessarily support the real-balance effect or the idea of diminishing marginal utility.

If You Heard Overheard a Farmer Discussing His Planting Plans