Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."
What will be an ideal response?
Economic resources are seldom suitable for all types of production. Hence, when society demands more of a particular good or service, an increase in the demand for the resources most adaptable to its production will rise; as more of the good is produced, eventually less efficient inputs will be pressed into production. It is the utilization of these less efficient inputs that gives rise to higher societal cost of production.
You might also like to view...
During the mid 1980s the price of gasoline fell. Americans purchased not only more gasoline but other goods as well. Use consumer theory to explain why this happened
What will be an ideal response?
If the real value of an item bought ten years ago is less than it's nominal value at that time, what can one infer about the change in the overall price level during this ten year period?