Question

Which of the following choices correctly illustrates how changes in opportunity costs affect supply?

 

a. A farmer produces corn and wheat. The price of wheat rises, so he shifts his resources towards wheat. 

b. A fisherman fishes for lobsters and oysters. The price of lobsters rises, so he decides to spend more of his time fishing for oysters because he can make the same amount of money with fewer lobsters. 

c. A textbook for economics becomes cheaper, so more students opt to buy that particular textbook. 

d. Milk and cereal are complementary goods, so when the price of cereal falls, the quantity supplied of milk rises. 

 

d. A low price signals to consumers that they should buy a good.