The United States Lost 1.3 Million Acres of Farmland In 2021

EconEye Admin

4 years ago

Farmland decreased by over 1.9 million acres per year since 2014. The shrinking supply of farmland is due in part to developers purchasing farmland to expand suburbs to meet growing housing demand. Farmland prices increased significantly in 2021.—yahoo.com

Answer the following questions to check your understanding of the story.

What is the opportunity cost of converting farmland into suburbs?

The opportunity cost of converting farmland into suburbs is ______________.

a) all other potential uses for the farmland that were passed over to build the suburbs

b) the decrease in farm produce that would have been cultivated on that farmland

c) the price the developers pay for the farmland

d) the cost of building the infrastructure required to support the suburbs

The opportunity cost of an action is the highest-valued alternative forgone. What does society give up by converting farmland into suburbs?

The opportunity cost of an action is the highest-valued alternative forgone. The opportunity cost of converting farmland into suburbs is the decrease in farm produce that otherwise would have been cultivated on that farmland.

The PPF measures farmland on the y-axis and suburbs on the x-axis. Why is the PPF bowed outward?

The PPF is bowed outward because ______________.

a) farmland prices are rising

b) the demand for housing is increasing

c) land is equally productive whether it is used for farming or for suburbs

d) as suburbs expand, ever more productive farmland is repurposed

What does a bowed-out PPF tell us about the opportunity cost of building an additional suburb? Why does this feature of opportunity cost occur?

A bowed-out PPF shows that the opportunity cost of building an additional suburb increases as more suburbs are built. This occurs because initially the land used for suburbs is not prime agricultural land. But as the number of suburbs increases, the land used is more and more productive farmland, and the opportunity cost of building an additional suburb increases.

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