question archive A wine operator in France asks for your help making some economic decisions
A wine operator in France asks for your help making some economic decisions
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A wine operator in France asks for your help making some economic decisions. ANSWER A & B
a. The operation is deciding how to allocate a pesticide treatment across two of its grape fields. Because input costs have been increasing, the operation only has the budget for 83 gallons of the pesticide. The farm's objective is to maximize the production of grapes. The following production functions describe how output on each field responds to the pesticide, measured in gallons. The operator asks: what is the optimal allocation of the pesticide is between the two fields?
b. the operation is able to secure additional funding for the pesticide. The operation doubles the amount they apply to each field. Pick one field and report the effect on output. What sort of returns to scale does grape production on the field you chose exhibit?
