Question

Fabian’s factory produces and sells computers and gaming consoles. Over time, he determined that he could produce gaming consoles much more profitably than computer systems. What factor affected Fabian’s decision to produce only gaming consoles? A. foreign exchange rate B. protectionism policy C. trade restrictions D. opportunity cost

Answer 1

Answer:

D. Opportunity cost.

Explanation:

• Based on the question, the only information we have to know what led Fabian's decission is the fact that it is more profitable for him to produce gaming consoles than computer systems.
• Then, for him, it is costly to produce computer systems in terms of the earnings he would set aside if he does not produce gaming consoles (because he is producing  computer systems instead).
• Then, the opportunity cost of producing computer systems it is high: he could be earning more by producing gaming consoles.
• Then, based on the opportunity cost, he decides to produce only gaming consoles.