30 25 Initial PPF 20 New PPF 15 10 2 3 5 7 TRUCKS Suppose Carlos is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck per day is per day. Now, suppose Carlos is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is per day. From the previous analysis, you can determine that as Carlos increases his production of trucks, his opportunity cost of producing one more truck Suppose Carlos buys a new tool that enables him to produce twice as many trucks per hour as before, but it doesn't affect his ability to produce drums. Use the green points (triangle symbol) to plot his new PPF on the previous graph. Because he can now make more trucks per hour, Carlos's opportunity cost of producing drums is it was previously. co 1. DRUMS

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5. Opportunity cost and production possibilities
Carlos is a skilled toy maker who is able to produce both trucks and drums. He has 8 hours a day to produce toys. The following table shows the daily
output resulting from various possible combinations of his time.
Hours Producing
Produced
Choice
(Trucks) (Drums) (Trucks) (Drums)
A
8
4
B
2
10
4
4
2
15
D
6.
1
17
8
18
On the following graph, use the blue points (circle symbol) to plot Carlos's initial production possibilities frontier (PPF).
(?
30
25
Initial PPF
20
New PPF
15
10
1
2
3
5
7
8
TRUCKS
DRUMS
2.
Transcribed Image Text:5. Opportunity cost and production possibilities Carlos is a skilled toy maker who is able to produce both trucks and drums. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Hours Producing Produced Choice (Trucks) (Drums) (Trucks) (Drums) A 8 4 B 2 10 4 4 2 15 D 6. 1 17 8 18 On the following graph, use the blue points (circle symbol) to plot Carlos's initial production possibilities frontier (PPF). (? 30 25 Initial PPF 20 New PPF 15 10 1 2 3 5 7 8 TRUCKS DRUMS 2.
30
25
Initial PPF
20
New PPF
15
10
5
1
2
3
4
5
7
TRUCKS
Suppose Carlos is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck per day is
v per day.
Now, suppose Carlos is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is
v per day.
From the previous analysis, you can determine that as Carlos increases his production of trucks, his opportunity cost of producing one more truck
Suppose Carlos buys a new tool that enables him to produce twice as many trucks per hour as before, but it doesn't affect his ability to produce
drums. Use the green points (triangle symbol) to plot his new PPF on the previous graph.
Because he can now make more trucks per hour, Carlos's opportunity cost of producing drums is
it was previously.
Transcribed Image Text:30 25 Initial PPF 20 New PPF 15 10 5 1 2 3 4 5 7 TRUCKS Suppose Carlos is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck per day is v per day. Now, suppose Carlos is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is v per day. From the previous analysis, you can determine that as Carlos increases his production of trucks, his opportunity cost of producing one more truck Suppose Carlos buys a new tool that enables him to produce twice as many trucks per hour as before, but it doesn't affect his ability to produce drums. Use the green points (triangle symbol) to plot his new PPF on the previous graph. Because he can now make more trucks per hour, Carlos's opportunity cost of producing drums is it was previously.
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