The law of increasing opportunity cost reflects the fact that:
A)the production possibilities frontier is bowed inward.
B)resources are not perfectly substitutable.
C)resources cannot always be used efficiently.
D)an economy will operate at a point inside its production possibilities frontier.
E)an economy will operate at a point along its production possibilities frontier.

Question

Quizplus · Accepted Answer

The law of increasing opportunity cost states that as production of one good increases, the opportunity cost of producing another unit of that good increases. This is because resources are not perfectly substitutable and are better suited for producing one good over another, leading to higher opportunity costs as more of one good is produced.

The Law of Increasing Opportunity Cost Reflects the Fact That