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. Attempts 05. Opportunity cost and production possibilitiesMegan is a talented artist who sells hand-crafted goods on her website. Megan currently crafts and sells both knit caps and baskets. She spends 8hours 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.ChoiceBASKETSABCDE302520151050On the following graph, use the blue points (circle symbol) to plot Megan's initial production possibilities frontier (PPF).0Hours Crafting(Knit caps) (Baskets) (Knit caps)028614Keep the Highest 0/520234684KNIT CAPS5432106Produced(Baskets)0814161778Initial PPFNew PPFSuppose Megan 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 Megan 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 Megan increases her production of knit caps, her opportunity cost of producing one more knitcapSuppose Megan buys new tool that enables her to produce twice as many knit caps per hour as before, but doesn't affect her ability to producebaskets. 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, Megan's opportunity cost of producing baskets isit was previously.

Production possibility frontier is defined as the various production goods or commodities on the…

Suppose Megan 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 Megan 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 Megan increases her production of knit caps, her opportunity cost of producing one more knit cap Suppose Megan 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 baskets. Use the green points (triangle symbol) to plot her new PPF on the previous graph

Suppose Megan 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 Megan 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 Megan increases her production of knit caps, her opportunity cost of producing one more knit cap Suppose Megan 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 baskets. Use the green points (triangle symbol) to plot her new PPF on the previous graph

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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