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ID: 1164351 • Letter: H
Question
https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/basic-economics-concepts-macro/production-possibilities-curve-scarcity-choice-and-opportunity-cost-macro/v/production-possibilities-frontier?topic=microeconomics-1
Production Possibilities Frontier
What is the law of increasing opportunity cost?
Does the law of increasing opportunity cost apply for the Production Possibilities Frontier in the case of Rabbits and Berries?
If the opportunity cost of Rabbits with respect to Berries (and/or vice versa) was constant, what would the PPF look like?
Explanation / Answer
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. As production increases, the opportunity cost does as well.
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