Question

The law of increasing opportunity cost says that A. wages increase as employment increases B. interest rates rise as inflation increases C. the cost of increasing employment opportunities increases with specialization D. the more of something we produce, the less expensive it becomes E. the more of something we produce, the greater is the opportunity cost of producing an additional unit

Answer 1

Answer:

E. the more of something we produce, the greater is the opportunity cost of producing an additional unit

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

An example to illustrate increasing opportunity cost. Let us assume that Emily can use her leisure time to either rest or make spaghetti. If Emily uses 1 hour to make spaghetti, she forgoes 1 hour that she could have spent resting. If she spends 2 hours making spaghetti, she forgoes two hours of rest. Her opportunity cost keeps increasing the longer she spends making spaghetti.

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