Question

. In East Icicle, Minnesota, on the northern edge of the corn belt, the growing season is short and the soil is poor. Corn yields are meager unless a great deal of fertilizer is 3 used. In Corncrib, Illinois, the land is fertile and flat and the growing season is 20 days longer. For any given expenditure per acre, corn yields are far greater than in East Icicle. Farmers in both places are profit maximizers who grow corn. We deduce that:

A. Marginal costs are the same in both places
B. MarginalcostsarehigherinEastIciclethaninCorncrib
C. MorefertilizerisusedperacreinEastIciclethaninCorncrib

D. More fertilizer is used per acre in Corncrib than in East Icicle

Answer 1

ANSWER:

The correct answer is option a that is marginal cost are the same in both the places. (as both are profit maximizers.)