... applies to land-intensive commodities but not to labor-intensive or capital-intensive commodities. If Econ Isle transitions from widget production to gadget production, it must give up an increasing number of widgets to produce the same number of gadgets. B) results in straight-line production possibilities curves rather than curves that are bowed outward from the origin. If, for example, the (absolute) slope at point BB in the diagram is equal to 2, to produce one more packet of butter, the production of 2 guns must be sacrificed. refutes the principle of comparative advantage. B. results in straight-line production possibilities curves rather than curves that are bowed outward from the origin. In economics, the law of increasing costs is a principle that states that once all factors of production (land, labor, capital) are at maximum output and efficiency, producing more will cost more than average. The law of increasing opportunity cost states that when a company continues raising production its opportunity cost increases. Specifically, if it raises production of one product, the opportunity cost of making the next unit rises. The law of increasing opportunity cost explains why the shape of the production possibilities curve is: bowed out (concave) from the origin of the graph. The law of increasing opportunity costs says that, as we produce more of a particular good, the opportunity cost of producing that good increases. This occurs because the producer reallocates resources to make that product. If, say, you pay your staff overtime to meet a sudden rush in demand, the added salary cost means your cost per item goes up. If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibilities curve is: The law of increasing opportunity costs: Question 15 options: refutes the principle of comparative advantage. The law of increasing opportunity costs Multiple Choice 02:31:48 applies to land-intensive commodities but not to labor intensive or capital-intensive commodities results in straight-line production possibilities curves rather than curves that are bowed outward from the origin. C. refutes the principle of comparative advantage. Increases in resources or improvements will tend to cause a society's production possibilities curve to: The law of increasing opportunity costs: A) applies to land-intensive commodities, but not to labor-intensive or capital-intensive commodities. Changing your methods of production can work around this problem. results in straight-line production possibilities curves rather than curves that are bowed outward from the origin. The law of increasing opportunity costs is a result of the fact that: resources are not equally productive in all output categories. Law of Increasing Opportunity Costs Defined. The law of increasing costs says that upping production can make your business less efficient. refutes the principle of comparative advantage. As the law says, as you increase the production of one good, the opportunity cost to produce the additional good increases. Save. Expert Answer . The best way to look at this is to review an example of an economy that only produces two things - cars and oranges. The law of increasing opportunity costs: A. applies to land-intensive commodities, but not to labor-intensive or capital-intensive commodities. The law of increasing costs holds that the opportunity cost: a. of a good decreases as the quantity of the good produced increases b. of a good is proportional to the resources used in its production c. of a good increases as more of the good is produced d. of a good does not change with the resources used in … opportunity cost is best defined as: the value of the best forgone alternative. 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