When the opportunity cost of producing a good rises as someone produces more of it,one experiences
A) normative economics.
B) increasing relative costs.
C) downward-sloping demand.
D) inferior goods.
E) increasing marginal utility.

Question

Quizplus · Accepted Answer

This is the law of increasing relative costs, which states that as production of one good increases, the opportunity cost of producing an additional unit of that good increases. This is because resources are not perfectly adaptable to producing both goods, and as more resources are used to produce one good, fewer resources are available to produce the other good, causing the opportunity cost to rise.

When the Opportunity Cost of Producing a Good Rises as Someone