Practice Exercises 7 1. Farmer Hoglund has discovered that on his farm, he can get 30 bushels of corn per acre if he applies no fertilizer. When he applies N pounds of fertilizer to an acre of land, the marginal product of fertilizer is 1 -N/200 bushels of corn per pound of fertilizer. (a) If the price of corn, p is $3 a bushel and the price of fertilizer is Sw per pound, how many pounds of fertilizer should he use per acre to maximize profits? (Hint: You need to write the profit maximizing quantity of fertilizer / as a function of the price of fertilizer w) (b) Hoglund's neighbour, Skoglund, has better land than Hoglund. In fact, for any amount of fertilizer that he applies, he gets exactly twice as much corn per acre as Hoglund would get with the same amount of fertilizer. How much fertilizer will Skoglund use per acre when the price of corn is $3 A bushel and the price of fertilizer is Sw a pound? (c) When Hoglund and Skoglund are both maximizing profits, will Skoglund's output be more than twice as much, less than twice as much or exactly twice as much as Hoglund's? Explain