Bren has almond orchards, but he is sick of almonds and prefers to eat walnuts i

Question

Bren 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 years crop with him Assume he produces 1,020 tons of almonds and his neighbor produces 777 tons of walnuts If the market price of almonds is $110 per ton and the market price of walnuts is $116 per ton: a. Should he make the exchange? b. Does it matter whether he prefers almonds or walnuts? Why or why not? a. Should he make the exchange? The market value of the almond crop is $ (Round to the nearest dollar.) The market value of the walnut crop is $ (Round to the nearest dollar.) So, should he make the exchange? 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?

Explanation / Answer

Ans a No

Ans b

True. Since both products are easily marketable.

Details Tons Price per ton Total Market Value Market Value of Almond Crop         1,020.00              110.00                1,12,200.00 Market Value of Walnut Crop             777.00              116.00                   90,132.00 Gain (Loss) on exchange for Brett                  -22,068.00 So, should he make the exchange No

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