Economics Production Possibility Frontier Questions
The law of increasing opportunity cost states that as the production of one good increases, the opportunity cost of producing an additional unit of that good also increases. This is because resources are not equally suited for the production of all goods, and as more resources are allocated to the production of one good, the resources that are best suited for producing that good are used up. Therefore, to produce additional units of that good, less efficient resources must be used, resulting in a higher opportunity cost.