Question

Maximization of total utility is consistent with the

a. bowed-outward production possibilities frontier.
b. law of increasing opportunity costs.
c. law of supply.
d. law of demand.

Answer 1

The maximization of total utility is consistent with the law of increasing opportunity costs.

Step-by-step explanation:

The maximization of total utility is consistent with the law of increasing opportunity costs.

The law of increasing opportunity costs states that as production of a good or service increases, the marginal opportunity cost of producing it also increases. This means that in order to produce more of one good, society must give up increasing amounts of another good. For example, if a country wants to produce more cars, it must allocate more resources to the car industry, resulting in a higher opportunity cost for producing other goods such as computers or clothing.

In the context of the production possibilities frontier, which illustrates the trade-offs between two goods, the law of increasing opportunity costs leads to a bowed-outward shape of the frontier. As more resources are allocated to the production of one good, the opportunity cost of producing additional units of that good increases, leading to a steeper slope and a curved frontier.