A Farmer Can Grow Either Apples or Oranges

question 81

Multiple Choice

A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

• A) decreases; down and to the right
• B) increases; down and to the right
• C) decreases; up and to the left
• D) increases; up and to the left

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Definitions:

Lost Sales

Revenue that a company could have earned but didn't, due to stockouts, inadequate capacity, or other factors.

Debt/Equity Ratio

An indicator of how the financing of company assets is divided between shareholder equity and debt.

All-Equity Firm

A company that finances its operations without any debt, relying solely on shareholder equity for funding.

Stock Price

The cost of purchasing a single share of a company, which fluctuates based on market conditions.