If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y, then the opportunity cost of producing the 2,001st unit of good is X is most likely to be
A)less than 0.5Y.
B)more than 0.5Y but less than 2Y.
C)more than 0.5Y.
D)less than 0.5Y but more than zero.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as we produce more of a good, the opportunity cost of producing an additional unit increases. This means that the opportunity cost of producing the 2,001st unit of good X will be higher than the opportunity cost of producing the 1,000th unit. Therefore, we can eliminate choices A and D. Additionally, since the opportunity cost of producing the 1,000th unit is already 0.5Y, it is unlikely that the opportunity cost of producing the 2,001st unit will be less than this amount. This eliminates choice B. Therefore, the most likely answer is that the opportunity cost of producing the 2,001st unit of good X is more than 0.5Y, which is given by choice C.

If the Law of Increasing Opportunity Costs Is Operable, and Currently