Three basic Economics Questions

Microeconomics
Student’s Name
Institution of Affiliation
Topic 1
Three basic Economics Questions
Apple Inc has opted to outsource the production of its iPhone’s components from 30 independent companies across the globe. The first economic question is what they will produce. The 30 companies will produce all the components that Apple uses to manufacture iPhones, for example, the batteries, phone screens, sound speakers among other components. The second question relates to how the 30 companies will produce the components for the iPhones. They will produce the components based on the demand by Apple. The production would also depend on their specialization. They will as well produce them in mass to enjoy the economies of scale. The third question is for whom they will produce the components. They will produce the components for Apple, which will in turn produce the iPhones for the final consumers that prefer the iPhone to other types of phones.
Does the outsourcing move by Apple affects the consumer decision?
The move by apple to outsource the largest proportion of its labor might affect the consumers’ decision to buy its products. For example, since the Apple products might become cheaper than before, following the division of labor, the demand for the products might go up. However, outsourcing might compromise the quality of the products, which might make the consumers not to buy the company’s products.
Pops and cons of outsourced production by Apple
One of the key advantages for both consumers and producers relates to the lower costs. For example, it would be cheaper for the companies to manufacture the components because of specialization compared to Apple doing the production. This would translate to lower cost of production for the companies and affordable prices for the consumers. Outsourcing as well ensures high-quality products because of the skilled labor from the outsourced companies. However, a k...