Related to the Economics in Practice on p. 5: The opportunity cost to Apple of having the hard drive produced in Japan by Toshiba is
A) the wages paid to Japanese workers.
B) the components of the hard drive which are not produced by Toshiba.
C) having the hard drive produced by the next best available company.
D) the value-added captured by Apple in the United States.

Question

Quizplus · Accepted Answer

The opportunity cost to Apple of having the hard drive produced in Japan by Toshiba is the production that could have been done by the next best available company, which could potentially have been more efficient or cost-effective. The wages paid to Japanese workers and the value-added captured by Apple in the United States are not related to the concept of opportunity cost in this scenario. The components of the hard drive not produced by Toshiba are not the opportunity cost because they are not related to the decision to choose Toshiba as the producer of the hard drive.

Related to the Economics in Practice on P