Poornima is a skilled toy maker who is able to produce both boats and drums. 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 (Boats) (Drums) A 8 0 B 6 с 4 D 2 E 0 ? 30 25 20 DRUMS 5 10 5 2 4 6 8 (Boats) 4 3 2 1 0 3 (Drums) 0 8 13 15 16 0 1 2 6 7 8 4 BOATS Suppose Poornima is currently using combination D, producing one boat per day. Her opportunity cost of producing a second boat per day is per day. Now, suppose Poornima is currently using combination C, producing two boats per day. Her opportunity cost of producing a third boat per day is per day. From the previous analysis, you can determine that as Poornima increases her production of boats, her opportunity cost of producing one more boat Initial PPF ÷ New PPF 5
Poornima is a skilled toy maker who is able to produce both boats and drums. 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 (Boats) (Drums) A 8 0 B 6 с 4 D 2 E 0 ? 30 25 20 DRUMS 5 10 5 2 4 6 8 (Boats) 4 3 2 1 0 3 (Drums) 0 8 13 15 16 0 1 2 6 7 8 4 BOATS Suppose Poornima is currently using combination D, producing one boat per day. Her opportunity cost of producing a second boat per day is per day. Now, suppose Poornima is currently using combination C, producing two boats per day. Her opportunity cost of producing a third boat per day is per day. From the previous analysis, you can determine that as Poornima increases her production of boats, her opportunity cost of producing one more boat Initial PPF ÷ New PPF 5
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 1PA
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