The law of increasing relative costs, depicted by the concavity of the production opportunities frontier, is most closely related to the
A)downward slope of the demand curve.
B)upward slope of the demand curve.
C)downward slope of the supply curve.
D)upward slope of the supply curve.

Question

Quizplus · Accepted Answer

The law of increasing relative costs states that as production of one good increases, the opportunity cost of producing additional units of that good increases. This is depicted by the concavity of the production possibilities frontier. As such, the upward slope of the supply curve is most closely related to the law of increasing relative costs, as it reflects the idea that as more of a good is produced, the cost of producing additional units increases.

The Law of Increasing Relative Costs, Depicted by the Concavity