Opportunity cost and production possibilities Musashi is a skilled toy maker who is able to produce both boats 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. Choice Hours Producing Produced (Boats) (Drums) (Boats) (Drums) A 8 0 4 0 B 6 2 3 11 C 4 4 2 16 D 2 6 1 19 E 0 8 0 20 On the following graph, use the blue points (circle symbol) to plot Musashi's initial production possibilities frontier (PPF). 1Suppose Musashi is currently using combination D, producing one boat per day. His opportunity cost of producing a second boat per day is per day. A. 1 DRUM B.3 DRUM C.16 DRUM D.19 DRUM 2Now, suppose Musashi is currently using combination C, producing two boats per day. His opportunity cost of producing a third boat per day is per day. A.1 DRUM B.5 DRUM C.11 DRUM D.16 DRUM 3. From the previous analysis, you can determine that as Musashi increases his production of boats, his opportunity cost of producing one more boat . A.DECREASES B.INCRESS C.REMAINS CONSTANT Suppose Musashi buys a new tool that enables him to produce twice as many boats 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. 4. Because he can now make more boats per hour, Musashi's opportunity cost of producing drums is _______it was previously. A. HIGHER THAN B. LOWER THAN C.THE SAME AS
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Musashi is a skilled toy maker who is able to produce both boats 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.
|
Choice |
Hours Producing |
Produced |
||
|---|---|---|---|---|
|
(Boats) |
(Drums) |
(Boats) |
(Drums) |
|
| A | 8 | 0 | 4 | 0 |
| B | 6 | 2 | 3 | 11 |
| C | 4 | 4 | 2 | 16 |
| D | 2 | 6 | 1 | 19 |
| E | 0 | 8 | 0 | 20 |
On the following graph, use the blue points (circle symbol) to plot Musashi's initial production possibilities frontier (
1Suppose Musashi is currently using combination D, producing one boat per day. His opportunity cost of producing a second boat per day is per day.
A. 1 DRUM
B.3 DRUM
C.16 DRUM
D.19 DRUM
2Now, suppose Musashi is currently using combination C, producing two boats per day. His opportunity cost of producing a third boat per day is per day.
A.1 DRUM
B.5 DRUM
C.11 DRUM
D.16 DRUM
3. From the previous analysis, you can determine that as Musashi increases his production of boats, his opportunity cost of producing one more boat .
A.DECREASES
B.INCRESS
C.REMAINS CONSTANT
Suppose Musashi buys a new tool that enables him to produce twice as many boats 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.
4. Because he can now make more boats per hour, Musashi's opportunity cost of producing drums is _______it was previously.
A. HIGHER THAN
B. LOWER THAN
C.THE SAME AS
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