According to the law of increasing opportunity costs,
A)Greater production leads to greater inefficiency.
B)Greater production means factor prices rise.
C)Greater production of one good requires increasingly larger sacrifices of other goods.
D)Higher opportunity costs induce higher output per unit of input.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as the production of one good increases, the opportunity cost of producing another unit of that good will increase. This is because resources are not perfectly adaptable to the production of both goods, and as more resources are shifted towards producing one good, the resources that are best suited for producing the alternative good become scarcer and therefore more expensive. This leads to increasingly larger sacrifices of other goods and higher opportunity costs.

According to the Law of Increasing Opportunity Costs