The law of increasing costs indicates that
a. as more goods are produced, the dollar cost of producing those goods increases
b. no matter how many goods you produce, costs tend to increase
c. the opportunity cost of producing a good increases as more of the good is produced
d. although total cost may increase as you produce more of a good, the opportunity cost of producing additional units of the good actually decreases
e. because you are able to adopt greater division of labor when producing more goods, the opportunity cost of producing a good increases as less of the good is produced
C
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When the Dallas Cowboys score more than 30 points in a game, they win the game. This is an example of
A) an economic theory. B) a correlation. C) an incentive to win the game. D) a normative statement. E) a statement on the margin.
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. In a closed economy, who has the comparative advantage in catching fish?
A. Sheila and Jim B. Sheila C. Jim D. Neither of them