Question

Brett has almond​ orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this​ year's crop with him. Assume he produces 1,000 tons of almonds and his neighbor produces 800 tons of walnuts. If the market price of almonds is $100 per ton and the market price of walnuts is $110 per​ ton.

A. Should he make the​ exchange? The market value of the almond crop is _____.
B. Does it matter whether he prefers almonds or​ walnuts? Why or why​ not?

Answer 1

(A) The almond market value is = 100,000 and the walnuts market value is 88,800. (B) His preferences are secondary, the most important choice is the market value of the profit and crop

Step-by-step explanation:

Solution

Given that:

The first step to take is to find the almond crop market value which is stated as follows:

(A) The market value of almond is = 1000 * 100 = 100,000

Thus,

The walnuts market value is = 800* 111 = 88,800

he should not make the exchange because, the almond has more value

(B)His choice is not really important, the market value of the profit and crop should be of more importance.