If a farmer decides to allocate more land for growing coffee instead of wheat, what is the opportunity cost?
The increase in coffee production
The decrease in wheat production
The total output of both coffee and wheat
The value of the next best alternative foregone when growing more coffee
1 answer
The opportunity cost in this situation would be the decrease in wheat production. This is because by allocating more land for coffee, the farmer is giving up the opportunity to produce more wheat on that land.