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.

Question

Quizplus · Accepted Answer

When the market price of corn rises, the opportunity cost of producing soybeans increases because the farmer foregoes the higher potential earnings from growing corn instead of soybeans.

Land Used to Grow Corn Could Also Be Used to Grow