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The law of increasing costs means that as production shifts from one item to another?

  
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The law of increasing costs means that as production shifts from one item to another?

Postby adusa37 » Wed Apr 11, 2012 12:36 pm

A. the cost of production gets cheaper and cheaper.
B. the cost of producing an item stays the same no matter how many are produced.
C. more and more resources are necessary to increase production of the second item.
D. the land costs of increasing production rise much more steeply than do the labor costs.
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The law of increasing costs means that as production shifts from one item to another?

Postby porter » Wed Apr 11, 2012 12:44 pm

A
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The law of increasing costs means that as production shifts from one item to another?

Postby elkanah1 » Wed Apr 11, 2012 12:46 pm

The ans is A.

Beacause when firm starts production and use benefits of division of labour, so each additional unit of labour add less to the TC (Total Cost) then the previous one whereas add the same amount in TP(total product).

Regards : Osama Khan
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