Suppose Sam is currently using combination D, producing one crochet hat per day. His opportunity cost of producing a second crochet hat per day is per day. Now, suppose Sam is currently using combination C, producing two crochet hats per day. His opportunity cost of producing a third crochet hat per day is per day. From the previous analysis, you can determine that as Sam increases his production of crochet hats, his opportunity cost of producing one more crochet hat Suppose Sam buys a new tool that enables him to produce twice as many crochet hats per hour as before, but it doesn't affect his ability to produce pillows. Use the green points (triangle symbol) to plot his new PPF on the previous graph. Because he can now make more crochet hats per hour, Sam's opportunity cost of producing pillows is it was previously.

Suppose Sam is currently using combination D, producing one crochet hat per day. His opportunity cost of producing a second crochet hat per day is per day. Now, suppose Sam is currently using combination C, producing two crochet hats per day. His opportunity cost of producing a third crochet hat per day is per day. From the previous analysis, you can determine that as Sam increases his production of crochet hats, his opportunity cost of producing one more crochet hat Suppose Sam buys a new tool that enables him to produce twice as many crochet hats per hour as before, but it doesn't affect his ability to produce pillows. Use the green points (triangle symbol) to plot his new PPF on the previous graph. Because he can now make more crochet hats per hour, Sam's opportunity cost of producing pillows is it was previously.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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