1. A farm operator in south-western Ohio asks for your help making some economic decisions for the farm.

A. The operation raises both beef cattle and sheep. Both animals benefit from the addition of fortified feed into their diet, but the farmer has only a limited quantity available: 38 hundred pounds. The farmer has calculated that the profit per pound is $5.50 for the beef cattle and $4.25 for the sheep. Given the following production functions that relate the weight of the finished animal to the fortified feed, what is the optimal allocation of the fortified feed between the two?

= 85 3.72

= 71 5.62 (Ff is fortified feet)

B. Does beef production have diminishing marginal returns for the fortified feed input? Does sheep production? If yes, how do you know?