The law of increasing opportunity cost occurs because resources are not completely adaptable to alternative uses.

Question

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The law of increasing opportunity cost states that as production of a good increases, the opportunity cost of producing an additional unit rises. This is because resources are not perfectly adaptable to the production of all goods, so as more resources are diverted to produce one good, less efficient resources are used, increasing the cost.

The Law of Increasing Opportunity Cost Occurs Because Resources Are