3.14 You are employed by a firm like Adams Land and Cattle Company, a huge cattle feedlot in Nebraska with a capacity of 85,000 to 90,000 head of cattle.

Cattle on feedlots are fed diets that are heavy in barley; one steer eats more than 8 pounds of barley per day. Suppose that your firm feeds your cattle 200 tons of barley per day and has a stockpile of 4,000 tons of barley for which it paid $250 per ton.

a. If the current price of barley is $300 per ton, what is your company’s opportunity cost per day of feeding all its cattle?

b. If the current price of barley is $200 per ton, what is the opportunity cost per day of feeding all the cattle?

c. Are your answers to parts a and b the same, or are they different? Explain why.