Title: oppertunity costs

Essay Details

Subject: Business
Author:
Date: January 9, 2014
Level: University
Grade: A
Length: 4 / 1098
No of views: 0
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Essay text:

This is known as the "law of increasing opportunity costs." The economic rational for the law of increasing opportunity costs is that economic resources are not completely adaptable to alternative uses. The opportunity cost of producing a product tends to increase as more of it is produced because resources less suitable to its production must be employed...

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Prices are a measure of opportunity cost because they provide information about the value of one product in relation to another. The shape of the Productions Possibility Frontier, (PPF), illustrates the principle of increasing opportunity costs (Graph 3). As more of one product is produced, increasingly larger amounts of the other product must be given up...

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