Which of the following describes the law of increasing opportunity cost?
The law of increasing opportunity costs states that: if society wants to produce more of a particular god, it must sacrifice larger and larger amounts of another good to do so. Which situation would most likely cause a nation’s production possibilities curve to shift inward?
What model is used to illustrate the concept of opportunity cost?
production possibilities frontier
What is the law of increasing opportunity cost quizlet?
law of increasing opportunity costs. the principle that as the production of a good increases, the opportunity cost of producing an additional unit rises.
What is the reason for the law of increasing opportunity costs group of answer choices?
The law of increasing opportunity cost is the concept that as you continue to increase production of one good, the opportunity cost of producing that next unit increases. This comes about as you reallocate resources to produce one good that was better suited to produce the original good.
What is the principle of increasing opportunity cost?
The law of increasing opportunity cost is an economic principle that describes how opportunity costs increase as resources are applied. (In other words, each time resources are allocated, there is a cost of using them for one purpose over another.)
What is opportunity cost give example?
Examples of Opportunity Cost. Someone gives up going to see a movie to study for a test in order to get a good grade. The opportunity cost is the cost of the movie and the enjoyment of seeing it. … The opportunity cost of taking a vacation instead of spending the money on a new car is not getting a new car.
What is opportunity cost concept?
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics. Because by definition they are unseen, opportunity costs can be easily overlooked if one is not careful.
What is opportunity cost diagram?
Definition – Opportunity cost is the next best alternative foregone. If we spend that £20 on a textbook, the opportunity cost is the restaurant meal we cannot afford to pay. If you decide to spend two hours studying on a Friday night. The opportunity cost is that you cannot have those two hours for leisure.
Why is opportunity cost important?
Opportunity cost is a key concept in economics, and has been described as expressing “the basic relationship between scarcity and choice”. The notion of opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently.
Why does the law of increasing opportunity cost occur quizlet?
The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises. … the law of increasing opportunity costs is driven by the fact that economic resources are not completely adaptable to alternative uses.
Which statement is an economic rationale for the law of increasing opportunity cost?
The economic rationale for the law of increasing opportunity costs is that economic resources are not completely adaptable to alternative uses. I.e., in order to produce more pizzas, we need more pizza bakers. When moving from A to E, pizza bakers become increasingly scarce.
Does the principle of increasing opportunity cost hold in this nation?
Econ 221 – Microeconomics Homework 1 Fall 2012 Jake Brock 12:30 b) Does the principle of “increasing opportunity cost” hold in this nation? Explain briefly. (2 points) a. No the principle does not hold in this nation because as consumer goods increases capital goods decrease.
What is per unit opportunity cost?
PER UNIT OPPORTUNITY COST EQN. Opportunity Cost/Units Gained Lost/Gained. Productive Efficiency. Products are all being produced in the least costly way.
When the opportunity cost of a choice increases?
When the opportunity cost of a choice increases: Individuals are less likely to choose that same option. An example of a marginal decision is deciding whether to: Buy 1 more apple or 1 more banana.