Farmer Fred could grow wheat and barley. He could grow 75 bushels ...

[Mimi]

Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is 2.00 per bushel and the price of barley  0.80 . Show the benefits to Fred from specialization. What should he specialize in?

Question 2

Which of the following was not one of Malthus assumptions?
 a. stable prices
 b. production with only two inputs - land and labor
  c. a fixed supply of land
 d. human desire to increase the population

[kmb352]

Answer to Question 1

Farmer Fred could make 150 if he grew only wheat and just 100 if he grew only barley. By specializing in wheat production he will be better off. Even though he can produce more bushels of barley than he can bushels of wheat, his opportunity cost of producing wheat (the 100 income sacrificed. is lower than the opportunity cost of producing barley (150 in sacrificed income).

Answer to Question 2

a

[Mimi]

Wow, this really help

[Joy Chen]

Thanks for the timely response, appreciate it