Suppose that Company A's railroad cars pass through Farmer B's corn fields. The railroad causes an externality to the farmer because the railroad cars emit sparks that cause $1,500 in damage to the farmer's crops. There is a special soy-based grease that the railroad could purchase that would eliminate the damaging sparks. The grease costs $1,200. Suppose that the farmer has the right to compensation for any damage that his crops suffer. Assume that there are no transaction costs. Which of the following characterizes the efficient outcome?Group of answer choicesThe railroad will continue to operate but will pay the farmer $1,500 in damages.The railroad will purchase the grease for $1,200 and pay the farmer nothing because no crop damage will occur.The farmer will incur $1,500 in damages to his crops.The farmer will pay the railroad $1,200 to purchase the grease so that no crop damage will occur.

Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given byTC = .1q2 + 2q + 30MC = .2q + 2The level of profits isQuestion 4Select one:a.30.b.-10.c.20.d.10.

Each passage below is followed by a question. Read the passage carefully and answer the question that follows.From a certain farming region, trucks can carry vegetables to markets in Pune in two days for a total cost of Rs 3000. A train will carry the vegetables there in four days for Rs 2000. If reducing time in transit is more important to the owner of the vegetables than is reducing the shipping bill, he or she will send the vegetables by truck.Which of the following is an assumption made in the passage above?Vegetables can be sold more profitably when shipped by train than by truck.Other than speed and cost, there are no significant differences between truck and train transportation from the farming region to Pune.The time required to ship vegetables by train from the farming region to Pune could be reduced to two days if the price for this service were raised.Most owners of vegetables in the region are more concerned with shipping costs than with the time involved in shipping vegetables to market.

Assume John agrees to sell 800 pounds of wheat to a flour mill on May 15 for $3 per pound. However, John refuses to deliver the contracted wheat because the market price then was $5 per pound. If true, the flour mill can recover _______ in damages from John.Multiple choice question.$1600$400$4000$800

Multiple Choice QuestionThe price-support strategy exacerbated which of the following problems?Multiple choice question.The presence of too many farmers in the marketThe hazardous conditions faced by agricultural workersThe low prices farmers received for their outputThe inability of consumers to afford agricultural products

Which of the following is an implicit cost of owning and operating a farm?multiple choicethe money a farmer could earn by working for someone elsethe money paid for repairing a tractorthe money received for crops grown during the growing seasonthe money paid for fertilizer each growing season