Final answer:
The law of increasing opportunity cost states that as the production of a good or service increases, the opportunity cost of producing each additional unit also increases. This is because some resources are better suited for producing certain goods and services and are less efficient or effective when applied to others.
Step-by-step explanation:
The law of increasing opportunity cost states that as the production of a good or service increases, the opportunity cost of producing each additional unit also increases. This is because some resources are better suited for producing certain goods and services and are less efficient or effective when applied to others.
For example, let's say a country is producing both skis and snowboards. Initially, the country is only producing skis, and the opportunity cost of producing additional skis is relatively low. However, as the country starts producing more snowboards instead, the opportunity cost of producing additional snowboards increases, as resources that are well-suited for producing skis are now being used for snowboards.
This pattern of increasing opportunity cost holds true in various scenarios, such as government spending for reducing crime or allocating resources to education and healthcare.