1) I would go with C, increases a firms costs.
2) Hummm, a confusing question, which needs clarification and simplifying assumptions. I presume the farmer does not get rid of half of his labor as a result of losing half of his land. Since each laborer has less land to work with the MP of labor should go down. Second, assuming the lost land is measurably no different from the remaining land, the farmer simply has less land. Since we are assuming diminishing return, the MP of land should go up. I would go with B.