Question

Farmer Jack grows watermelons on his farm. He can plant up to 3 bags of watermelon seeds each season. Each bag costs him $100 and he can sell each watermelon for $5. Based on the information in the table below, answer the following questions. Bags of Seeds Watermelon Yield 1 30 2 50 3 60 Question 2 What is his marginal cost? _______ Question 3 What is the marginal benefit of growing 1 bag of seeds? ________ Question 4 What is the marginal benefit of growing 2 bags of seeds? ________ Question 5 What is the marginal benefit of growing 3 bags of seeds? ________ Question 6 If he is being rational, what is the maximum number of bags of seeds he should plant? ______

Answer 1

question (2) Marginal Cost = Change in cost / Change in quantity

                                            =  400 / 100 = $ 4

Q(3)   Marginal Benefit = $500-$100 = $ 400

Q(4) Marginal benefit of 2 bags of seeds = $ 1000-$200 = $ 800

Q(5) Marginal Benefit of 3 bags of seeds = $ 1500-$300 =$ 1200

If he is being rational,maximum number of bags = depends on land available