The law of increasing opportunity cost is an economic principle that describes how opportunity costs increase as resources are applied. Quizlet is essentially a flashcard app, so every item in a study set has two pieces: a question or trigger and a response.
What does the law of increasing costs mean in economics?
The law of increasing costs means that when an economy increases the production of one item, what happens to the opportunity cost? Opportunity cost goes up. According to the law of increasing costs, as production shifts from making one item to another, more and more resources are necessary to increase production of the second item.
What happens to the opportunity cost as the production increases?
Opportunity cost goes up. According to the law of increasing costs, as production shifts from making one item to another, more and more resources are necessary to increase production of the second item. Therefore, the opportunity cost increases.
What is an efficient economy Quizlet?
An efficient economy is one that Uses its resources to make the most goods and services. An efficient economy uses resources in such a way as to maximize the output of goods and services. The law of increasing costs means that when an economy increases the production of one item, what happens to the opportunity cost?
How much does Econ 131 Chapter 1 cost?
Subjects Explanations Create Study sets, textbooks, questions Log in Sign up Upgrade to remove ads Only $35.99/year Econ 131 Chapter 1 STUDY Flashcards Learn Write Spell Test PLAY Match Gravity Created by pinkyghurl Terms in this set (50)
What happens to the opportunity cost of producing an additional unit?
What is the definition of increase in factors of production?
What happens to opportunity cost when workers are completely substituted?
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What is meant by the law of increasing 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 the law of increasing opportunity costs quizlet?
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.
What does increasing opportunity costs mean quizlet?
Law of Increasing Opportunity Costs. the more of a product that society produces, the greater is the opportunity cost of obtaining an extra unit. The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises. Shape of the curve.
What is the law of increasing opportunity costs and why is it true?
Lesson 5: The law of increasing opportunity cost: As you increase the production of one good, the opportunity cost to produce the additional good will increase. First, remember that opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up.
What is the main effect of increasing opportunity costs quizlet?
the primary effect of increasing opp. costs is less than complete specialization.
What is the law of increasing returns?
The law of increasing returns is also called the law of diminishing costs. The law of increasing return states that: The tendency of the marginal return to rising per unit of variable factors employed in fixed amounts of other factors by a firm is called the law of increasing return".
Which of the following is an illustration of the law of increasing opportunity costs?
Which of the following is an illustration of the law of increasing opportunity costs? As more cars are produced, the opportunity cost of each additional car is greater than for the preceding unit.
What does the law of increasing opportunity costs imply about a production possibilities curve?
The law of increasing opportunity cost tells us that, as the economy moves along the production possibilities curve in the direction of more of one good, its opportunity cost will increase.
What is the difference between increasing and constant opportunity cost?
Constant costs imply that all resources are of equal quality and that they are all equally suited to the production of both commodities. Increasing opportunity costs mean that for each additional unit of G produced, ever-increasing amounts of D must be given up.
Why do we believe the law of increasing costs?
The law of increasing cost explains why costs can increase as production increases. If you own a business or work in the field of economics, then understanding the law of increasing cost can help you make informed decisions for your company and use your company's production resources efficiently.
Which of the following is an illustration of the law of increasing opportunity costs?
Which of the following is an illustration of the law of increasing opportunity costs? As more cars are produced, the opportunity cost of each additional car is greater than for the preceding unit.
What does the law of increasing opportunity costs imply about a production possibilities curve?
The law of increasing opportunity cost tells us that, as the economy moves along the production possibilities curve in the direction of more of one good, its opportunity cost will increase.
How does a PPC show the law of increasing opportunity cost?
When the PPC is a straight line, opportunity costs are the same no matter how far you move along the curve. When the PPC is concave (bowed out), opportunity costs increase as you move along the curve. When the PPC is convex (bowed in), opportunity costs are decreasing.
What is opportunity cost give example?
The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.
The law of increasing opportunity costs causes the - Course Hero
The law of increasing opportunity costs causes the production possibilities from ECN 212 at Scottsdale Community College
chapter 3 quiz Flashcards | Quizlet
Study with Quizlet and memorize flashcards containing terms like (Refer to the diagram) A decrease in demand is depicted by a:, (Refer to the diagram) A decrease in quantity demanded is depicted by a:, (Refer to the diagram) A decrease in supply is depicted by a: and more.
The law of increasing opportunity cost explains why
What is the law of increasing opportunity cost? The law of increasing opportunity cost states that each time the same decision is made in resource allocation, the opportunity cost will increase.4 дня назад
ECON 131 Chapter 1 Flashcards | Quizlet
Study with Quizlet and memorize flashcards containing terms like The production possibilities curve illustrates the basic principle that: A. the production of more of any one good will in time require smaller and smaller sacrifices of other goods. B. an economy will automatically obtain full employment of its resources. C. if all the resources of an economy are in use, more of one good can be ...
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What happens to the opportunity cost of producing an additional unit?
As production of a good increases, the opportunity cost of producing an additional unit rises.
What is the definition of increase in factors of production?
1. Increase in factors of production: resources used to produce goods and services.
What happens to opportunity cost when workers are completely substituted?
If workers (resources) are completely substituted, the opportunity cost is fixed and the same for all units of outputs.
What is the law of increasing costs?
The law of increasing costs states that as production shifts from making one good to another, more resources are needed to increase production of the second good. Therefore, the opportunity cost increases. The opportunity cost of growing strawberries will increase.
What happens to the opportunity cost when production shifts?
Therefore, the opportunity cost increases.
What is an efficient economy?
a toy store without dolls. An efficient economy is one that. Uses its resources to make the most goods and services. An efficient economy uses resources in such a way as to maximize the output of goods and services.
What happens to the opportunity cost of additional units of a good as output increases?
as output increases for either one of the goods on a production possibilities curve, the opportunity cost of additional units of that good will be greater and greater.
Which country has a comparative advantage in automobile production and should specialize in coffee?
a. Brazil has a comparative advantage in automobile production and should specialize in coffee.
Is it wasteful to produce too much of any one good?
a. it's wasteful to produce too much of any one good.
What is the difference between consumer goods and capital goods?
The basic difference between consumer goods and capital goods is that: A. consumer goods are produced in the private sector and capital goods are produced in the public sector. B . an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate.
What does "utility" mean in economics?
An economy cannot produce at a point outside of its production possibilities curve because human economic wants are insatiable. A. True. B. False. C. pleasure or satisfaction. For economists, the word "utility" means: A. versatility and flexibility. B. rationality. C. pleasure or satisfaction.
What would happen if the interest rate was 16 percent?
But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent, $20 ...
What happens to the opportunity cost of producing an additional unit?
As production of a good increases, the opportunity cost of producing an additional unit rises.
What is the definition of increase in factors of production?
1. Increase in factors of production: resources used to produce goods and services.
What happens to opportunity cost when workers are completely substituted?
If workers (resources) are completely substituted, the opportunity cost is fixed and the same for all units of outputs.
