As resources are not perfectly adaptable to the production of both Good A and Good B,_____.
A)the opportunity cost of Good A increases as the production of Good A increases.
B)the opportunity cost of Good A decreases as the production of Good A increases.
C)it is impossible for the economy to produce both Good A and Good B.
D)the opportunity cost of Good A is constant.
E)the opportunity cost of Good B is constant.

Question

Quizplus · Accepted Answer

The concept of opportunity cost states that as the production of one good increases, the production of another good decreases. As resources are not perfectly adaptable to the production of both goods, the opportunity cost of producing one good will increase as more resources are dedicated to its production. Therefore, the opportunity cost of Good A will increase as the production of Good A increases.

As Resources Are Not Perfectly Adaptable to the Production of Both