The law of increasing opportunity costs limits international specialization.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as a country specializes in producing one good, the opportunity cost of producing additional units of that good increases. This means that it becomes increasingly inefficient to produce more of that good and the country may be better off producing a different good instead. Therefore, this law limits the ability of a country to specialize completely in one area and encourages diversification of production.

The Law of Increasing Opportunity Costs Limits International Specialization