The ________ states that the opportunity cost of producing a good always rises as one produces more of it.
A) law of increasing relative cost
B) law of positive economics
C) law of demand
D) production possibilities frontier (PPF)model
E) zero-sum game

Question

Quizplus · Accepted Answer

The law of increasing relative cost, also known as the law of increasing opportunity cost, states that as the production of one good increases, the opportunity cost of producing an additional unit of that good increases, leading to a higher production cost. This occurs because resources are not equally efficient in producing different types of goods. Therefore, to produce more of one good, an increasing amount of resources needs to be diverted from producing another good, which becomes less efficient for that purpose.

The ________ States That the Opportunity Cost of Producing a Good