What is the opportunity cost of increasing the production of televisions from point C to point E? For a better understanding of this idea, it is necessary to know the meaning of the opportunity cost and review an example of the way how the law works in practice. Next lesson. A country has an absolute advantage in the production of a good if that country: All of the following are evidences of specialization except: An economy's production possibilities frontier: If all resources are used efficiently to produce goods and services, a nation will find itself producing: A production possibilities frontier will be bowed out if: The law of increasing opportunity cost explains why: Which of the following would shift the production possibilities frontier outward? The economic question of' For Whom to produce' is about decisions related to who is going to consume the goods and services produced. the opportunity cost of producing an additional unit Rises. 20. A Positive economic analysis concerns what is, whereas a Normative economics analysis represent subjective statements about what ought to be. 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. The maximum potential output for a combination of two or more final goods and services, Efficiency in production. The law of increasing opportunity costs: A. applies to land-intensive commodities, but not to labor-intensive or capital-intensive commodities. Rather, in its place they have substituted opportunity or alternative cost. The law of diminishing returns only applies in cases where: A) there is increasing scarcity of factors of production. 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. 22. Other-things-equal, 28. The law of increasing opportunity costs causes the production possibilities curve to: A) be a straight line. 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 cost states that as production of a particular good increases. States that as more of a good is produced, its opportunity cost increases c. Implies that the more resources the economy uses, the greater their cost Implies that the more of good X that is produced, the more costly are the resources. Resources that are not equally productive nor interchangeable in the production of different goods and services. 178. The law of increasing opportunity cost states that when a company continues raising production its opportunity cost increases. The law of increasing opportunity cost is fundamental to the law of supply. According to the law of increasing opportunity costs: A) Higher opportunity costs induce higher output per unit of input. According to the law of increasing opportunity costs, A. The law of increasing costs is best defined as. The set of mechanisms and institutions that resolve the basic economic questions is called the: Adam Smith's term "the invisible hand" refers to: A major distinguishing feature between capitalist and socialist (or command) economies is that: Adam Smith believed that people's pursuit of their own self-interests: Pure capitalism and a pure command system represent. Changing your methods of production can work around this problem. #5 demonstrates this. Which of the following best describes the relationship between trade-offs and opportunity cost. It would what occurred if this is the case. The use of market prices and sales to signal desired outputs (or resource allocations) is called, 23. `Quiz #1 1. Aug 25 2014 02:28 AM. 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