Poornima is a skilled toy maker who is able to produce both boats and kites. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time. Choice Hours Producing Produced (Boats) (Kites) (Boats) (Kites) A 8 0 4 0 B 6 2 3 11 C 4 4 2 17 D 2 6 1 19 E 0 8 0 20 On the following graph, use the blue points (circle symbol) to plot Poornima's initial production possibilities frontier (PPF). Initial PPFNew PPF012345678302520151050KITESBOATS 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 . Suppose Poornima buys a new tool that enables her to produce twice as many boats per hour as before, but it doesn't affect her ability to produce kites. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more boats per hour, Poornima's opportunity cost of producing kites is it was previously.

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

Question

Poornima is a skilled toy maker who is able to produce both boats and kites. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time.

Choice	Hours Producing	Produced
(Boats)	(Kites)	(Boats)	(Kites)
A	8	0	4	0
B	6	2	3	11
C	4	4	2	17
D	2	6	1	19
E	0	8	0	20

On the following graph, use the blue points (circle symbol) to plot Poornima's initial production possibilities frontier (PPF).

Initial PPFNew PPF012345678302520151050KITESBOATS

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 .

Suppose Poornima buys a new tool that enables her to produce twice as many boats per hour as before, but it doesn't affect her ability to produce kites. Use the green points (triangle symbol) to plot her new PPF on the previous graph.

Because she can now make more boats per hour, Poornima's opportunity cost of producing kites is it was previously.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

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