Final answer:
The extraction method (option C) is used for land valuation, which separates the land value from the overall improved property value. Marginal analysis is employed to determine that the optimal amount of land to restore is 300 acres, after which marginal costs exceed benefits.
Step-by-step explanation:
The land valuation method that uses a ratio of land to improved value is called extraction. This method involves determining the value of the land by extracting it from the total value of the property which includes both the land and the improvements made to it. The extraction method assumes that the total value of a property can be broken down into land value and the value of the improvements.
An important concept related to land valuation and decision-making in economics and business is marginal analysis. Marginal analysis helps determine the optimal amount of resources to allocate to a project. In the given scenario, if we apply marginal analysis, the optimal amount of restored land is 300 acres. This is because beyond this quantity, the marginal costs incurred for restoring additional land are greater than the marginal benefits obtained from it.