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Question 2 25 Marks Labulani Madise operates a 100-hectare farm in the prime farming region of Ventersdorp. He is currently busy with the planning of
Question 2 25 Marks Labulani Madise operates a 100-hectare farm in the prime farming region of Ventersdorp. He is currently busy with the planning of the next farming season and has approached you for assistance based on a tip by his son who is your university friend in the Faculty of Agriculture. He has promised you a reasonatile reward for your efforts. The farm always grows wheat and sunflower each season and always must comply with the rovernment quota (allocation) system which requires at least 30 hectares of wheat and 20 hectares of sunflower for each season to be planted and harvested. A hectare typically ylelds 8 tons of wheat and 10 soris of sanflowers, a ton af wheat sells for N52 500 and a ton of suntiower sells for N\$2 200. Each hectare of wheat requires 2 tons of fertilizer which is sourced at N\$80 per 50kg bag. 5 unflower requires 2.5 tons of fertilizer which costs N 120 per 100kq bag Both crops are sprayed by a pesticide called fenvalerate, the ideal spray is 100 litres per hectare of wheat and 150 litres per hectare of sunflower. In large quantities, this pesticide is harmflui to birds, as such, the government only allows a maximum of 9000 litres to be used at farms of Mr Modise's size. A litre of the pesticide conts NSAO A hectare of wheat requires 480 labour minutes and suntlower requires 300 minutes. The cost per direct labour hour is NS400. A total of 42000 mimuter is wailable for the farming season. All other variable costs are N\$3 000 per hectare of wheat and NS4 000 per hectare of sunflower. Fixed costs allocated foc a hectare of wheat is NS1 500 and wanflower hectare is NS1 800 respectivel;. Required: 21. Use the graphical method and determine the combination of hecrares of mhat and sunflower to manimise contribution. Indicate the feasible region on a vaph anitulaitate the profit at each of the eatreme points. 20 Marbs 22. Eased on your answer in (2.1) abeve, compute the shadow price of a litre of pesticlde at the optimal combination of wheat and sunflower. 5 Marks Note found gg to the nearest whole number e. 5,30.5 becomes 31
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