The Principle of Increasing Marginal Opportunity Cost Does Not Hold

question 103

Multiple Choice

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

• A) All inputs are equally useful in the production of all goods.
• B) Some inputs are more useful in the production of certain goods.
• C) Some inputs are less useful in the production of certain goods.
• D) Each input is useful in the production of a limited number of goods.

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Definitions:

Scale

The size, extent, or level of something, typically used in the context of production or operations to indicate magnitude or capacity.

Returns to Scale

A concept in economics that describes how the output of a firm changes as all its inputs are increased proportionally.

Short Run

A period in economics during which at least one factor of production is fixed, limiting the adjustment processes of the economy.

Production Function

A mathematical representation of the relationship between inputs used in production and the output generated.