ANS: b 10 If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is likely to be a. less than 5Y. 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. The economy was at point A producing 100X and 200Y. Therefore, if your production rises from, for example, 100 to 200 units a day, costs will increase. Produces 100A and 200B and country 2 produces 300A and 700B. 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. As the law says, as you increase the production of one good, the opportunity cost to produce the additional good increases. b) greater than 1/5Y but less than 5Y. Try our expert-verified textbook solutions with step-by-step explanations. b.more than 1/5Y but less than 5Y. The law of increasing costs is an economic concept that demonstrates the relationships between the factors and costs of production. More Than 0.5Y But Less Than 2Y O C More Than 0.5Y O D Less Than 0.5Y But More Than Zero. Cost is measured in terms of opportunity cost . Yıldırım Beyazıt University - Cinnah Campus, Trinity Valley Community College • PHYS 1401, Trinity Valley Community College • ECON 2302, Monroe College, New Rochelle • ECON 670-144, Yıldırım Beyazıt University - Cinnah Campus • ECON 204, Northwestern State University • ECONOMICS 2000, Chapter 02 Production Possibilities Frontier Framework.pdf. • Question 11 0 out of 2 points Exhibit 2-6 Refer to Exhibit 2-6. The law of increasing costs states that when production increases so do costs. This preview shows page 6 - 10 out of 14 pages. In reality, however, opportunity cost doesn't remain constant. As production increases, the opportunity cost does as well. Thus, increasing opportunity cost results in increased price and increased supply. Similarly, with scarce resources, when you decide to increase the production of certain goods over a specific limit, you need to compensate for it by producing lesser of the other goods. If Maria and Maya each specialize in the good in which she has a comparative, Advantage the then engage in trade, __ can consume a combination of goods that lies beyond her PPF. The law of supply states that as the price of a good increases, the quantity of that good supplied increases. C) … B. if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of other goods to do so. O E None Of The Above If The L The opportunity cost of one unit of Y for Keisha is, 37. 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. Currently country 1. An economy can produce the following combinations of goods: 50X and 0Y, 40X and 10Y, 30X and, 20Y, 20X and 30Y, 10X and 40Y, and 0X and 50Y. Law of Increasing Opportunity Costs Defined. The factors of production are the elements we use to produce goods and services. C) … c. more than 5Y Find answers and explanations to over 1.2 million textbook exercises. The law of increasing opportunity cost is fundamental to the law of supply. Course Hero is not sponsored or endorsed by any college or university. The law of increasing opportunity costs says that, as we produce more of a particular good, the opportunity cost of producing that good increases. The best way to look at this is to review an example of an economy that only produces two things - cars and oranges. If you can either go to work or go to the beach, and you choose to work, the opportunity cost of working is the value you would have gotten had you gone to the beach. The law of increasing opportunity cost is a concept that is often employed in business and economic circles. This occurs because the producer reallocates resources to make that product. Question 14 5 / 5 pts With respect to a PPF for goods X and Y, productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y. If the law of increasing opportunity costs is operable and currently the, 11 out of 11 people found this document helpful, 32. It moved to point B where it produces, 34. 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 economy was at point A producing 100X and 200Y. University of Texas, Rio Grande Valley • ECON 2301, Trinity Valley Community College • ECON 2301, Trinity Valley Community College • PHYS 1401, Northern University of Malaysia • BEEB 1013, Trinity Valley Community College • ECON 2302, Dated 1-26-20 Chapter 2 study questions PPF curves.doc, University of Texas, Rio Grande Valley • BUSINESS BLAW. If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is a) less than 5Y. c.more than 5Y d.less than 1/5Y but more than … Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B. Question: QUESTION 16 Aw Of Increasing Opportunity Costs Is Operable, And Currently The Then The Opportunity Cost Of Producing The 2,001st Unit Of Good Is X Is Most Likely To Be O A Less Than 0.5Y O B. Country 1 produces two goods, A and B. It moved to point B where it produces 200X and 300Y. The law of increasing opportunity costs states that A. if the sum of the costs of producing a particular good rises by a specified percent, the price of that good must rise by a greater relative amount. 36. If the law of increasing opportunity costs is operable, and currently the opportunity cost of, unit of good X is 5Y, then the opportunity cost of producing, 33. If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is most likely to be a.less than 5Y. The PPF between goods X and Y will be a downward-sloping, straight line if constant opportunity costs exist, 38. The law of increasing opportunity cost states that each time the same decision is made in resource allocation, the opportunity cost will increase. B) more than 0.5Y but less than 2Y. Thus, diminishing marginal returns imply increasing marginal costs and increasing average costs. 115. If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y, then the opportunity cost of producing the 2,001st unit of good is X is most likely to be The law of increasing opportunity cost states that when a company continues raising production its opportunity cost increases. This happens when all the factors of production are at maximum output. Keisha can produce the following combinations of X and Y: 100X and 20Y, 50X and 30Y, or 0X and, 40Y. Specifically, if it raises production of one product, the opportunity cost of making the next unit rises. Opportunity cost is something that is foregone to choose one alternative over the other. Which of the following is true? Essentially, this law states that, as additional units of a good are manufactured, the opportunity cost associated with that production will also increase. In other words, this principle describes how opportunity costs increase as resources are applied. B) more than 0.5Y but less than 2Y. Which graph best depicts the consequence of a large-scale natural disaster? In this case the law also applies to societies – the opportunity cost of producing a single unit of a good generally increases as … According to the law of increasing opportunity costs: A. d) less than 1/5Y but more than zero. If a production possibilities frontier (PPF) is concave downward, it follows that 101. The law of increasing costs, a commonly held economic principle, states that an operation running at peak efficiency and fully utilizing its fixed-cost resources, will experience a higher cost of production and decreased profitability per output unit with further attempts at increasing production. 39. c) greater than 5Y. Answer Selected Answer: (1) Correct Answer: (2) • Question 12 0 out of 2 points The law of increasing opportunity cost If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of … This preview shows page 2 - 3 out of 3 pages. If the law of increasing opportunity costs is operable, and currently the opportunity cost of Producing the 101 st unit of good X is 5Y, then the opportunity cost of producing 201 st unit of good is X is most likely to be more than 5Y 33. Returning to the fast-food example above, this means: The law of increasing opportunity costs states that the opportunity cost of having three employees performing inventory is significant. If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is … b. the opportunity costs (of producing the good on the horizontal axis) rise as more of the, the opportunity costs (of producing the good on the horizontal axis) fall as more of the, d. the opportunity costs (of producing the good on the horizontal axis) first rise and then, If there is always a 3-for-1 trade between producing good X and Y, it follows that the. If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be A) less than 0.5Y. This Buzzle article talks about the 'Law of Increasing Opportunity Cost' in brief. This preview shows page 2 - 3 out of 3 pages. If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of … If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is most likely to be a. less than 5Y. Question 11 0 out of 2 points Exhibit 2-6 Refer to Exhibit 2-6. The more one is willing to pay for resources, the smaller will be the possible level of production. The production possibilities frontier (PPF), a straight (downward-sloping) line because the opportunity cost of producing the two goods is, 35. b. more than 1/5Y but less than 5Y. The fact that the opportunity cost of additional snowboards increases as the firm produces more of them is a reflection of an important economic law. If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be A) less than 0.5Y. opportunity costs are constant between two goods. Country 2 produces the same two goods. Course Hero is not sponsored or endorsed by any college or university. 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