A Farmer Can Grow Soy or Sorghum

question 126

Multiple Choice

A farmer can grow soy or sorghum. If the price of soy increases, the opportunity cost of growing sorghum ______, shifting the supply curve of sorghum ______.

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

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Definitions:

Marginal Benefit

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

Marginal Cost

The cost involved in generating an extra unit of a product or service.

Market Economy

A type of economic system where decisions regarding investment, production, and distribution are based on supply and demand, with minimal government intervention.

Efficient

Optimally using resources in a manner that maximizes the production of goods and services without wasting them.