Production possibilities (alternatives) Refer to the above table.For these data the law of increasing opportunity costs is reflected in the fact that:
A)the amount of consumer goods which must be sacrificed to get more capital goods diminishes beyond a point.
B)larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.
C)the production possibilities data would graph as a straight downsloping line.
D)the economy's resources are presumed not to be scarce.

Question

Production possibilities (alternatives)  Refer to the above table.For these data the law of increasing opportunity costs is reflected in the fact that:
A)the amount of consumer goods which must be sacrificed to get more capital goods diminishes beyond a point. 
B)larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods. 
C)the production possibilities data would graph as a straight downsloping line. 
D)the economy's resources are presumed not to be scarce.

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as the economy tries to produce more of one good, the opportunity cost of producing that good increases as more and more resources are diverted from other goods. In the table, as more capital goods are produced (moving from left to right), larger and larger amounts of consumer goods must be sacrificed to do so (moving downward along the columns). Therefore, B is the correct answer.

Production Possibilities (Alternatives) Refer to the Above Table