17. Opportunity cost and production possibilities Antonio is a talented artist who sells hand-crafted goods on his website. Antonio currently crafts and sells both tea towels and pillows. He spends 8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of his time is spent on each good. Hours Crafting Produced Choice ( Tea towels) (Pillows) (Tea towels) (Pillows) A 8 0 4 O 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 Antonio's initial production possibilities frontier (PPF). 30 25 Initial PPF 20 A New PPF 15 PILLOWS 10 5 0 0 2 3 4 5 6 7 8 TEA TOWELSSuppose Antonio is currently using combination D, producing one tea towel per day. His opportunity cost of producing a second tea towel per day is V per day. Now, suppose Antonio is currently using combination C, producing two tea towels per day. His opportunity cost of producing a third tea towel per day is 7 per day. From the previous analysis, you can determine that as Antonio increases his production of tea towels, his opportunity cost of producing one more tea towel Y . Suppose Antonio buys a new tool that enables him to produce twice as many tea towels 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 tea towels per hour, Antonio's opportunity cost of producing pillows is 7 it was previously