The law of increasing opportunity cost says that:
A) opportunity costs of production always tend to increase.
B) increases in wages cause increases in the opportunity costs of production.
C) as output increases for one good on its production possibilities curve, the opportunity cost of additional units of the other good will be greater and greater.
D) along a production possibilities curve, as output increases in the production of one good, the opportunity costs of additional units of the other good will be less and less.

Question

Quizplus · Accepted Answer

The law of increasing opportunity cost states that as the production of one good increases, the opportunity cost of producing additional units typically increases. This occurs because resources are not perfectly adaptable to producing both goods, so the opportunity cost of producing one good increases as more and more of it is produced. Therefore, Choice C is the correct answer. Choices A, B, and D are incorrect because they do not accurately reflect the law of increasing opportunity cost.

The Law of Increasing Opportunity Cost Says That