In Appellia, it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons, and so on. The need for increasing resources is an example of
A) comparative advantage.
B) diminishing returns to specialization.
C) absolute advantage.
D) mercantilism
E) Porter's diamond model.

Question

Quizplus · Accepted Answer

This scenario illustrates diminishing returns to specialization, where each additional unit of output requires more resources than the previous unit, indicating decreasing efficiency.

In Appellia, It Takes 10 Units of Resources to Increase