-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) decreases
B) increases
C) is impossible to calculate without numbers on the axes
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) decreases 
B) increases 
C) is impossible to calculate without numbers on the axes 
D) remains the same

Quizplus · Accepted Answer

A drought reduces the amount of wheat produced, which typically means that resources are less efficiently used for wheat production, increasing the opportunity cost of producing additional units of wheat.

-An Economy Produces at Point a on the PPF Shown