-An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat .
A) increases
B) is impossible to calculate without numbers on the axes
C) decreases
D) remains the same

Question

-An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat .
A) increases 
B) is impossible to calculate without numbers on the axes 
C) decreases 
D) remains the same

Quizplus · Accepted Answer

When a drought reduces the amount of wheat produced, the opportunity cost of producing wheat increases because resources are now scarcer, making it more costly to produce each additional unit of wheat.

-An Economy Produces at Point a on the PPF Shown