AFTER THE CHART Suppose Frances is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is per day. Now, suppose Frances is currently using combination C, producing two trucks per day. Her opportunity cost of producing a third truck per day is per day. From the previous analysis, you can determine that as Frances increases her production of trucks, her opportunity cost of producing one more truck . Suppose Frances buys a new tool that enables her to produce twice as many trucks per hour as before, but it doesn't affect her ability to produce puzzles. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more trucks per hour, Frances's opportunity cost of producing puzzles is it was previously.
AFTER THE CHART Suppose Frances is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is per day. Now, suppose Frances is currently using combination C, producing two trucks per day. Her opportunity cost of producing a third truck per day is per day. From the previous analysis, you can determine that as Frances increases her production of trucks, her opportunity cost of producing one more truck . Suppose Frances buys a new tool that enables her to produce twice as many trucks per hour as before, but it doesn't affect her ability to produce puzzles. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more trucks per hour, Frances's opportunity cost of producing puzzles is it was previously.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter1: Ten Principles Of Economics
Section: Chapter Questions
Problem 2CQQ
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AFTER THE CHART
Suppose Frances is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is per day.
Now, suppose Frances is currently using combination C, producing two trucks per day. Her opportunity cost of producing a third truck per day is per day.
From the previous analysis, you can determine that as Frances increases her production of trucks, her opportunity cost of producing one more truck .
Suppose Frances buys a new tool that enables her to produce twice as many trucks per hour as before, but it doesn't affect her ability to produce puzzles. Use the green points (triangle symbol) to plot her new PPF on the previous graph.
Because she can now make more trucks per hour, Frances's opportunity cost of producing puzzles is it was previously.
Transcribed Image Text:5. Opportunity cost and production possibilities
Frances is a skilled toy maker who is able to produce both trucks and puzzles. 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
(Trucks)
(Puzzles)
(Trucks)
(Puzzles)
8.
4
6.
3.
8.
4
4
14
6.
1
16
8
17
On the following graph, use the blue points (circle symbol) to plot Frances's initial production possibilities frontier (PPF).
30
Initial PPF
25
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ABC DE
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