Question

The law of increasing opportunity costs indicated that

A. Resources are perfectly mobile except for transportation costs
B. The sum of all costs cannot rise above the market price of a product
C. To produce more of one good, society must sacrifice larger and larger amounts of alternative goods
D. If the prices of all the resources involved in the production of goods increase, the cost of producing those goods will increase at the same rate

Answer 1

The law of increasing opportunity cost states that as production increases, so does the marginal opportunity cost. This is due to resources being better suited for certain types of production. The concept is represented by the outward-bending shape of the production possibilities frontier.

Step-by-step explanation:

The law of increasing opportunity cost states that as the production of a good or service increases, the marginal opportunity cost of producing it also increases. This is because resources are not equally suitable for all types of production. For example, when a government invests more in reducing crime, the initial increase in opportunity cost may be small. However, as additional resources are allocated to crime reduction, the opportunity cost increases at a larger rate. This concept is represented by the outward-bending shape of the production possibilities frontier (PPF).