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Law of Increasing Opportunity Cost: Definition & Concept

Instructions:

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question 1 of 3

The Law of Opportunity Costs states that as you ........... production of one good, the opportunity cost of that good ........... (fill in the blanks).

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1. What curve is best used to illustrate the law of increasing opportunity costs?

2. The law of increasing opportunity costs is based on the notion that as you reallocate resources from producing one good to producing another, you will be ____ the efficiency of those resources.

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About This Quiz & Worksheet

Test your ability to understand the law of increasing opportunity cost by using these assessments. You will be quizzed on the curve used to represent this law, and what various characteristics of this curve mean.

Quiz & Worksheet Goals

This quiz and worksheet can help you review information associated with the law of increasing opportunity costs, including:

  • What this law states
  • The curve used to illustrate it
  • What happens to the efficiency of resources as they are reallocated
  • Opportunity cost and the PPF

Skills Practiced

This quiz and worksheet combo can help you practice the following skills:

  • Defining key concepts - ensure that you can accurately define main phrases, such as opportunity cost and the PPF
  • Information recall - access the knowledge you have gained regarding the law of increasing opportunity cost
  • Knowledge application - use acquired knowledge to determine what happens to the opportunity cost along a PPF

Additional Learning

To learn more about opportunity costs, the lesson titled Law of Increasing Opportunity Cost: Definition & Concept will help you. This lesson covers objectives such as:

  • Determine how to use a PPF
  • Define opportunity cost
  • Understand the law of increasing opportunity cost
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