The Law of Increasing Cost Is Based Upon Which of the Following

question 108

Multiple Choice

The Law of Increasing Cost is based upon which of the following?

• A)If units of a resource are added to a fixed proportion of other resources,eventually marginal output will decline.
• B)Economies of scale eventually outweigh diseconomies of scale.
• C)Resources become more suitable for use in the production process as the output of one good expands.
• D)All of the choices are true.

---

Definitions:

Price Index

A statistical measurement that tracks changes in the price level of a basket of goods and services over time.

Inventories

The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

GDP

The total value of all end products and services created within a country's borders during a certain time frame defines Gross Domestic Product.

Production

The process of creating goods or services by combining labor, capital, and raw materials in order to meet consumer demand.