Economists usually assume that production is subject to increasing opportunity costs because:

Question

Quizplus · Accepted Answer

Increasing opportunity costs occur because not all resources are equally suitable for producing all goods. This means that as more of a certain good is produced, resources that are better suited for other goods must be diverted, resulting in increasing costs and a trade-off between producing different goods. The other choices are incorrect because higher production does not necessarily result in more inflation (A), individuals do not necessarily desire constantly increasing opportunities (C), and it is possible to increase the production of all goods simultaneously if resources are not limited (D).

Economists Usually Assume That Production Is Subject to Increasing Opportunity