The demand for onions is very inelastic. Draw a supply/demand diagram that shows how the equilibrium price and quantity will change when a drought reduces supply. Label the axes and the prices and quantities both before and after the supply change. Then, write a few sentences explaining what happened to prices relative to quantities and why.

Suppose you have a choice to make between two options. Let’s say for example at one particular time you need to carry out two activities. Now that is not possible as time is a scarce resource. You can either study for one hour or play for one hour. You need to make choice between these two alternatives. Suppose you decide to study for one hour then opportunist cost of this activity would be the sacrifice you will have to make in order to gain the activity of studying or the next best alternative that would be forgone.