The Al-Habsi family owns a big farm in Rustaq. Three choices exist for how to use the farm: i Grow garlic, where garlic yield wouid be 70.bags per acre. The price of garlic is RO 3.5 per bag and production costs are RO140.per acre (Pxa) - pnduhun =( 1.5 X70)-140= 105 RO- rwenue ii. Grow cucumber, where cucumber yield would be S0 bags per acre. The price of cucumber is RO 2,5.per bag and production costs are RO150 per (2.5xs0) - 150, -25RO loves acre iii. Lease/rent out the acres to Mr. Al-Kindi (a neighbor) who will pay RO 80 per acre. With the lease/rent option the Al-Habsi family would still have expenses of RO 35.per acre. Based on the information above, answer the following questions: 80-15- 45Ror tue O Which alternative should the Habsi family undertake? Why? Q. Given your answer above, what is the Habsi's opportunity cost per acre? (Ed What is the total economic cost pèr acre for your answer?

The Al-Habsi family owns a big farm in Rustaq. Three choices exist for how to use the farm: i Grow garlic, where garlic yield wouid be 70.bags per acre. The price of garlic is RO 3.5 per bag and production costs are RO140.per acre (Pxa) - pnduhun =( 1.5 X70)-140= 105 RO- rwenue ii. Grow cucumber, where cucumber yield would be S0 bags per acre. The price of cucumber is RO 2,5.per bag and production costs are RO150 per (2.5xs0) - 150, -25RO loves acre iii. Lease/rent out the acres to Mr. Al-Kindi (a neighbor) who will pay RO 80 per acre. With the lease/rent option the Al-Habsi family would still have expenses of RO 35.per acre. Based on the information above, answer the following questions: 80-15- 45Ror tue O Which alternative should the Habsi family undertake? Why? Q. Given your answer above, what is the Habsi's opportunity cost per acre? (Ed What is the total economic cost pèr acre for your answer?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A competitive industry has production processes that generate pollution. okay with studies carried out on the affected population, the marginal costs associated with contamination are constant and 500 u.m. for each unit of the good produced. These costs are associated with lost working days, illness treatment costs and the nuisance generated in the population. Currently the production level of the industry is 250 units and the market price is 1500 (um/unit). Market studies carried out by the firms estimate that if the price rises at 1,800 (mu/unit) the quantity demanded would drop to 200 units and the marginal cost of production of each firm at this new production level is 1,300 (m.u./unit). assume linearity in market demand and in the marginal costs of production of the firms. Graph to justify your answers. b)Graphically indicate and determine the magnitude of the social cost of the situation with a production level of 250 units.
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