In the context of marginal analysis, what is the opportunity cost of increasing the number of computers produced from 14 to 15?

• A. The amount of another good that must be given up to produce the 15th computer
• B. The average cost per computer when producing 15 computers
• C. The fixed cost associated with computer production
• D. The total cost of producing 15 computers

Answer: (A)

Verified step by step guidance

1. Understand the concept of opportunity cost in marginal analysis: it refers to the value of the next best alternative that must be sacrificed when making a decision.
2. Identify what is changing in the problem: the number of computers produced increases from 14 to 15, so we are interested in the cost or trade-off associated with producing that additional (15th) computer.
3. Recognize that the opportunity cost of producing the 15th computer is the amount of another good or resource that must be given up to allocate resources to this additional computer instead.
4. Distinguish opportunity cost from other cost concepts: average cost per computer is the total cost divided by quantity, fixed cost does not change with output, and total cost is the overall expense for producing all units, none of which directly represent the opportunity cost of producing one more unit.
5. Conclude that the opportunity cost in this context is best described as the amount of another good that must be given up to produce the 15th computer.