Final answer:
The opportunity cost of a good increases as more of the good is produced, due to resources being less efficiently used when shifted towards the production of one specific good, a concept illustrated by the increasing slope of the production possibilities frontier.
Step-by-step explanation:
The law of increasing costs holds that the opportunity cost of a good increases as more of the good is produced. This is because resources are not equally suited for producing all types of goods. As we shift resources towards the production of one good, we're often using them less efficiently, leading to greater incremental costs for additional units of that good. This concept is reflected in the curvature of the production possibilities frontier (PPF), which becomes steeper as we move towards higher production levels of one good, indicating a higher opportunity cost.In practice, say a government allocates more funds to reduce crime, the initial increase in opportunity cost might be small. But as the spending continues to rise, the opportunity costs of reducing crime increase significantly.
This is because the efficiency of each additional unit of resource spent on reducing crime starts to decrease. The same concept applies to producing goods or services in an economy: it becomes increasingly costly to produce more of a good the more you have already produced, thus the law of increasing opportunity cost.The law of increasing opportunity cost states that as production of a good or service increases, the marginal opportunity cost of producing it also increases. This happens because some resources are better suited for producing certain goods and services instead of others. For example, as a firm produces more snowboards, the opportunity cost of producing additional snowboards increases. This law is reflected in the outward-bending shape of the production possibilities frontier.