Production possibilities

-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of cola
A) decreases.
B) does not change.
C) initially increases then decreases.
D) increases.

Question

Production possibilities
 
-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of cola
A) decreases. 
B) does not change. 
C) initially increases then decreases. 
D) increases.

Quizplus · Accepted Answer

The opportunity cost of producing more pizza in terms of forgone cases of cola increases because to produce more pizza, increasingly larger amounts of cola production must be sacrificed. This is a reflection of the law of increasing opportunity costs, which states that as the production of one good increases, the opportunity cost of producing an additional unit of this good (in terms of the other good that must be forgone) also increases.

Production Possibilities -Based on the Above Table, as the Production of Pizza