The law of increasing opportunity cost is associated with the slope of the:
A) demand curve.
B) supply curve.
C) output curve.
D) production possibilities curve.

Question

Quizplus · Accepted Answer

The law of increasing opportunity cost states that as production of one good increases, the opportunity cost in terms of the other good will increase. This concept is best illustrated by the production possibilities curve, which shows the maximum amount of two goods that can be produced with a fixed amount of resources. The slope of the production possibilities curve becomes steeper as we move along the curve, indicating the increasing opportunity cost of producing more of one good. Therefore, the correct choice is option D.

The Law of Increasing Opportunity Cost Is Associated with the Slope