The law of increasing opportunity costs:

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as the production of one good increases, the opportunity cost of producing an additional unit of that good increases, resulting in a bowed-out shape of the production possibility curve. This can limit the extent to which a nation specializes in producing a particular product because the opportunity cost of producing more of that product increases. Therefore, option D is the correct choice. Option A is incorrect because the law applies to all types of commodities. Option B is incorrect because a bowed-out shape of the production possibility curve is the result of the law of increasing opportunity costs. Option C is incorrect because the law of increasing opportunity costs is consistent with the principle of comparative advantage.

The Law of Increasing Opportunity Costs