Problem
Mr. Jernigan owns a piece of land on which he grows corn. Corn production annually requires $2,000 in seed, $3,000 in fertilizer, and $6,000 in pesticides. Mr. Jernigan uses his own labor to grow the corn and therefore hires no workers. If Mr. Jernigan did not use his time to grow corn, he would instead be able to sell insurance, earning $40,000 per year. Suppose another farmer has just offered to pay Mr. Jernigan rent of $10,000 per year for use of the land.
If Mr. Jernigan refuses to rent the land to another farmer, then what will be his accounting costs from farming corn himself on his land? What will be his economic costs?