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

Question

Quizplus · Accepted Answer

An increase in the price of apples raises the opportunity cost of growing oranges, as the farmer foregoes more potential income by not growing apples. This causes the supply curve of oranges to shift up and to the left, indicating a decrease in the supply of oranges.

A Farmer Can Grow Either Apples or Oranges