5. Opportunity cost and production possibilities Caroline is a skilled toy maker

Question

5. Opportunity cost and production possibilities Caroline is a skilled toy maker who is able to produce both trains and kites. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time Hours Producing Produced Choice (Trains) (Kites) (Trains) (Kites) 4 10 16 18 19 4 4 On the following graph, use the blue points (circle symbol) to plot Caroline's initial production possibilities frontier (PPF) 25 Initial PPP 20 New PPF TRAINS

Explanation / Answer

Suppose carlonie is currently using combination D, producing one train per day. Her opportunity cost of producing a secohnd train per day is      2    per day .

Now suppose caroline is currantly using combination C, producing two trains per day . Her opportunity cost of producing a third train per day is    4   per day

From the perious analysis can detarmine that as caroline increase her production of trains her opportunity cost of producing one more train      10    .

Suppose caroline buy a new tool that enables her to produce twice as many trains per hour. As before but if doesnt affect her ability produce kitea. Use the green point (tringle symbol) to plot the new ppf on the pervious graph.

Because she can make train per hour. Caroline cost of producing kites is    NIL    it was previously.

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.