Question

A farmer has developed a new type of fertilizer. This new fertilizer costs 20

percent more to produce than the old fertilizer but has better results: The
same land now produces 25 percent more crops
for each harvest.
Which statement best describes one way the farm will be affected by using
this new fertilizer?
• A. Marginal benefits will increase for each harvest.
decrease for each piece of land.
• B. Marginal costs will
• c. Opportunity costs will decrease for each piece of land.
O D. Opportunity costs will increase for each harvest.

Answer 1

A. Marginal benefits will increase for each harvest.

This is the correct answer because the use of the new fertilizer has resulted in a 25% increase in crop yield for each harvest, which will increase the marginal benefits of the farm.