The law of increasing opportunity costs exists because:
A)resources are not equally efficient in producing various goods.
B)the value of the dollar has diminished historically because of persistent inflation.
C)wage rates invariably rise as the economy approaches full employment.
D)consumers tend to value any good more highly when they have little of it.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as production of one good increases, the opportunity cost of producing the next unit of that good increases. This is because resources are not equally efficient in producing different goods, and as more resources are shifted towards one good, the resources that are best suited for producing that good are used up first. As a result, producing more of that good requires giving up increasing amounts of other goods, making the opportunity cost of producing it higher.

The Law of Increasing Opportunity Costs Exists Because