Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces 1 comma 050 tons of almonds and his neighbor produces 774 tons of walnuts. If the market price of almonds is $ 103 per ton and the market price of walnuts is $ 114 per ton:

a. Should he make the exchange?

b. Does it matter whether he prefers almonds or walnuts? Why or why not?

Question

Business

Shawn

27 November, 07:03

Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces 1 comma 050 tons of almonds and his neighbor produces 774 tons of walnuts. If the market price of almonds is $ 103 per ton and the market price of walnuts is $ 114 per ton:

a. Should he make the exchange?

b. Does it matter whether he prefers almonds or walnuts? Why or why not?

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Answers (1)

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Judy · Answer 1

a. Should he make the exchange?

Brett Produces almonds = 1050 tons

Owner of walnut produces = 774 tons

Market Price almond = $103 per ton

Market Price of walnuts = $114 per ton

Therefore

The market value of the almond crop = (1050 tons) x ($103)

= $108,150

The market value of the walnut crop = (774 tons) x ($ 114)

= $88,236

He should not make the exchange since the price of almond is high than walnuts

b. Does it matter whether he prefers almonds or walnuts?

Why or why not?

No. His preference is irrelevant to the value of the crops.

Is the above statement true or false? True