In reality, why does the opportunity cost increase as production increases?

The choice highlighting the relationship between opportunity cost and production is based on the principle that as you allocate more resources to produce one good, the resources that are diverted from producing other goods will generally be less suited or efficient at producing that good. This is a fundamental concept in economics known as the law of increasing opportunity costs.

When production of a particular good is increased, to obtain more of that good, you must shift resources (like labor, capital, and land) from the production of other goods. Initially, transferring these resources may result in relatively low opportunity costs, as the resources moved may not have been as productive in their original use. However, as production continues to increase, the next units of the good produced will typically come from resources that are increasingly less suited for this production. This leads to a higher opportunity cost because you're sacrificing more valuable output from the other goods that could have been produced with those same resources.

As a result, the statement reflects the essential understanding of how opportunity costs behave in relation to resource allocation in production. As more resources are diverted toward a particular good, the benefits from the alternative uses for those resources decline, causing the opportunity cost of producing additional units of that good to increase.