Land Used to Grow Corn Could Also Be Used to Grow

question 160

Multiple Choice

Land used to grow corn could also be used to grow soybeans. Which of the following is true when the farmer plants soybeans and the market price of corn rises?

• A) The opportunity cost of producing soybeans decreases.
• B) The opportunity cost of producing soybeans increases.
• C) There will be no change in the opportunity cost of producing soybeans.
• D) The opportunity cost of producing corn increases.

---

Definitions:

Producer Surplus

The contrast between what is an acceptable amount for producers for a good or service and the actual amount they are paid.

Marginal Cost

The extra expenditure linked to producing one more unit of a product or service.

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Overproduction

The condition where production exceeds the demand, leading to surplus inventory, lower prices, and potential economic inefficiencies.