Which of the following is an illustration of the law of increasing opportunity costs?
A) As more cars are produced,the opportunity cost of each additional car is greater than for the preceding unit.
B) As more cars are produced,the opportunity cost of each additional car is less than for the preceding unit.
C) As more cars are produced,the opportunity cost of each additional car is the same as for the preceding unit.
D) People pay lower prices for cars the higher the costs of producing cars.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as production of a good increases, the opportunity cost of producing an additional unit of that good increases. In option A, as more cars are produced, the opportunity cost of each additional car is greater than for the preceding unit, which is in line with the law of increasing opportunity costs. Options B and C are incorrect as they do not follow the law of increasing opportunity costs. Option D is incorrect as it discusses prices and not opportunity costs.

Which of the Following Is an Illustration of the Law