Increasing marginal opportunity cost implies that:

• A. resources are perfectly adaptable to producing any combination of goods
• B. producing additional units of a good requires giving up increasingly larger amounts of another good
• C. the production possibilities frontier is a straight line
• D. allocative efficiency is always achieved regardless of the production point

Answer: (B)

Verified step by step guidance

1. Understand the concept of marginal opportunity cost: it refers to the additional amount of one good that must be given up to produce one more unit of another good.
2. Recall that increasing marginal opportunity cost means that as you produce more of one good, the opportunity cost of producing additional units rises, because resources are not equally efficient in producing all goods.
3. Recognize that this concept implies the Production Possibilities Frontier (PPF) is concave (bowed outwards), not a straight line, because the opportunity cost increases with more production of one good.
4. Analyze each option: if resources were perfectly adaptable, the opportunity cost would be constant, leading to a straight-line PPF, which contradicts increasing marginal opportunity cost.
5. Conclude that increasing marginal opportunity cost means producing additional units of a good requires giving up increasingly larger amounts of another good, which matches the correct answer.