Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. 5. Opportunity cost and production possibilitiesEleanor is a talented artist who sells hand-crafted goods on her website. Eleanor currently crafts and sells both knit caps and cutting boards. Shespends8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of her time is spent on eachgood.Hours CraftingProducedChoice (Knit caps) (Cutting boards) (Knit caps) (Cutting boards)CUTTING BOARDSABCDE302555D864201On the following graph, use the blue points (circle symbol) to plot Eleanor's initial production possibilities frontier (PPF).2024683KNIT CAPS54321070999910161819Initial PPFNew PPFSuppose Eleanor is currently using combination D, producing one knit cap per day. Her opportunity cost of producing a second knit cap per day isper day.Now, suppose Eleanor is currently using combination C, producing two knit caps per day. Her opportunity cost of producing a third knit cap per day isper day.From the previous analysis, you can determine that as Eleanor increases her production of knit caps, her opportunity cost of producing one more knitcapSuppose Eleanor buys a new tool that enables her to produce twice as many knit caps per hour as before, but it doesn't affect her ability to producecutting boards. Use the green points (triangle symbol) to plot her new PPF on the previous graph.Because she can now make more knit caps per hour, Eleanor's opportunity cost of producing cutting boards isit was previously.

PPF stands for "Production Possibility Frontier." It is a graphical representation used in economics…

Answered: 5. Opportunity cost and production…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Concept explainers

Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

5. Opportunity cost and production possibilities
Eleanor is a talented artist who sells hand-crafted goods on her website. Eleanor currently crafts and sells both knit caps and cutting boards. She
spends8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of her time is spent on each
good.
Hours Crafting
Produced
Choice (Knit caps) (Cutting boards) (Knit caps) (Cutting boards)
CUTTING BOARDS
A
B
C
D
E
30
25
5
5
D
8
6
4
2
0
1
On the following graph, use the blue points (circle symbol) to plot Eleanor's initial production possibilities frontier (PPF).
2
0
2
4
6
8
3
KNIT CAPS
5
4
3
2
1
0
7
09999
10
16
18
19
Initial PPF
New PPF
Suppose Eleanor is currently using combination D, producing one knit cap per day. Her opportunity cost of producing a second knit cap per day is
per day.
Now, suppose Eleanor is currently using combination C, producing two knit caps per day. Her opportunity cost of producing a third knit cap per day is
per day.
From the previous analysis, you can determine that as Eleanor increases her production of knit caps, her opportunity cost of producing one more knit
cap
Suppose Eleanor buys a new tool that enables her to produce twice as many knit caps per hour as before, but it doesn't affect her ability to produce
cutting boards. Use the green points (triangle symbol) to plot her new PPF on the previous graph.
Because she can now make more knit caps per hour, Eleanor's opportunity cost of producing cutting boards is
it was previously.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

From the previous analysis, you can determine that as Eleanor increases her production of knit caps, her opportunity cost of producing one more knit capdecreases .

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions