According to the law of increasing opportunity costs,
A)Greater production leads to greater inefficiency.
B)Greater production means factor prices rise.
C)Greater production of one good requires increasingly larger sacrifices of other goods.
D)Higher opportunity costs induce higher output per unit of input.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as the production of one good increases, the opportunity cost in terms of production of another good also increases. This means that as we devote more resources to the production of a particular good, we have to sacrifice increasing amounts of production of other goods. This is because resources are not perfectly adaptable to the production of all goods and services, so as we use more and more resources for one particular good, the opportunity cost of using those resources for other goods and services increases. Therefore, choice C is the correct answer.

According to the Law of Increasing Opportunity Costs