Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The opportunity cost of corn increases as more land is allocated to it.
B
Wheat production will not be affected by increasing corn production.
C
The production possibilities curve is a straight line because resources are interchangeable.
D
There is no opportunity cost involved in reallocating land for different crops.
Understanding the Answer
Let's break down why this is correct
Answer
This scenario illustrates the concept of opportunity cost, which is what a person gives up when they choose one option over another. In this case, the farmer has to decide how to use their 100 acres of land, and if they allocate 10 more acres to corn, they must reduce the area for wheat. This trade-off shows that resources like land are limited, and choosing to grow more corn means giving up some wheat, highlighting the opportunity cost of that decision. The production possibilities curve (PPC) represents the maximum output combinations of two goods, like corn and wheat, and in this example, moving along the curve indicates how increasing corn production reduces wheat output. For instance, if the farmer had 60 acres for corn and 40 for wheat, and then changed to 70 acres for corn, the lost wheat represents the opportunity cost of that decision.
Detailed Explanation
When the farmer uses more land for corn, they have to give up some wheat. Other options are incorrect because This answer suggests that wheat won't change if corn production increases; This answer says the production possibilities curve is a straight line.
Key Concepts
Opportunity Cost
Production Possibilities Curve (PPC)
Resource Allocation
Topic
Opportunity Cost and PPC
Difficulty
easy level question
Cognitive Level
understand
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