Consider the farmers talked about in the chapter who have land that is suitable for growing both wheat and soybeans. Suppose all farmers are currently farming wheat but the price of soybeans rises dramatically. pg53

a. Does the opportunity cost of producing wheat rise or fall?

b. Does this shift the supply curve for wheat (as in one of the panels of Figure 3.11), or is it a movement along a fixed supply curve?
What direction is this shift or movement?
Illustrate your answer on the figure below:

Transcribed Image Text:

Price of wheat per bushel Supply of wheat Quantity of wheat (in bushels)