To determine the opportunity cost for the United States to produce diamonds, we need to understand the concept of opportunity cost, which is the value of the next best alternative foregone when a decision is made. In this context, it means how much corn the United States would have to give up to produce one unit of diamonds.
Here is the step-by-step solution:
1. Identify the Production Capacities:
The United States can produce:
- Corn: 60 thousand units per week
- Diamonds: 10 thousand units per week
2. Define Opportunity Cost:
The opportunity cost of producing one unit of diamonds is the amount of corn foregone to produce that one unit of diamonds.
3. Calculate the Opportunity Cost:
To find the opportunity cost, you divide the number of units of corn that could be produced by the number of units of diamonds produced. Thus:
[tex]\[
\text{Opportunity Cost of One Unit of Diamonds} = \frac{\text{Units of Corn}}{\text{Units of Diamonds}}
\][/tex]
Substituting the values for the United States:
[tex]\[
\text{Opportunity Cost of One Unit of Diamonds} = \frac{60}{10} = 6
\][/tex]
So, for every unit of diamonds the United States decides to produce, it gives up 6 thousand units of corn.
Thus, the opportunity cost for the United States to produce diamonds is 6 thousand units of corn.
