The Law of Increasing Costs tells us that:?

The Law of Increasing Costs tells us that:

everything costs more as we consume more of it.

as we produce more of something, it always costs more per unit.

if we are on the PPF, as we produce more of product #1 we have to give up increasing amounts of product #2.

the cost of production is always increasing.

as prices increase, people consume a substitute product.

Answer:
I think the best answer to your question here is:
"if we are on the PPF, as we produce more of product 1 we have to give up increasing amounts of product 2."

The rest of the responses are close to being true, but are just barely off. For example:

"as prices increase, people consume a substitute product."
This is not technically true. As prices rise, DEMAND for substitutes rise, but demand for the original good does not disappear completely. People are simply more willing to try substitutes the higher a product's price becomes.

"the cost of production is always increasing"
Also not true. Newer technologies and innovative strategies and ideas can help lower costs of production.

"as we produce more of something, it always costs more per unit"
This sounds like it could be true, but it isn't. The per-unit cost, or the average cost, usually decreases as more units are produced, because the fixed cost does not increase per unit.

"everything costs more as we consume more of it"
This statement seems to imply, for example, that food prices rise the more food we eat. This isn't exactly true. With steady demand and consumption, prices should stay stable, all else equal.

Hope that helps.
well the law of increasing costs is someones stupid thinking. yeah many things increase in price as more is produced but when x amount of produced, prices eventually stablize and start decreasing rapidly. heres my example- check out transisters, ic chips, they were once hundreds of dollars now they are nearly pennies due to mass production and lots of demand. the amount of hard-drive space you get over time cost cheaper and cheaper.
Check this link:

http://en.wikipedia.org/wiki/law_of_incr...

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