Question

which of the following is an example of the law of increasing opportunity cost?
going to work rather than spending time with one’s family
utilizing the factors of production as efficiently as possible
free markets allocating resources rather than a central governing body
chopping down banana trees for the sake of cultivating more pineapples

Explanation:

The law of increasing opportunity cost states that as production of one good rises, the opportunity cost (lost production of another good) increases, because resources are not equally suited to all tasks.

• The first option is a basic trade-off, not increasing cost.
• The second refers to efficiency, not opportunity cost growth.
• The third describes resource allocation systems, not the law.
• The last option: As more banana trees are cut to grow pineapples, the best land for bananas is used first; later, land less suited to pineapples (but good for bananas) is repurposed, so the opportunity cost (lost bananas) rises with each additional pineapple grown.

Answer:

chopping down banana trees for the sake of cultivating more pineapples