Production possibilities
-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda
A) decreases.
B) initially increases then decreases.
C) increases.
D) does not change.

Question

Production possibilities
-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda
A) decreases. 
B) initially increases then decreases. 
C) increases. 
D) does not change.

Quizplus · Accepted Answer

The table shows the law of increasing opportunity cost, which means that as production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda increases. This is because resources are not equally efficient at producing pizza and soda, therefore as more resources are allocated to pizza production, the production of soda decreases, resulting in a higher opportunity cost for soda production.

Production Possibilities -Based on the Above Table, as the Production of Pizza