4. Opportunity cost and production possibilities Andrew is a skilled toy maker who is able to produce both cars 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. Hours Producing Produced Choice (Cars) (Drums) (Cars) (Drums) A 8 4 0 B 6 N W 10 N 16 A A 19 N 8 0 20 m 0 On the following graph, use the blue points (circle symbol) to plot Andrew's initial production possibility frontier (PPF). 30 Initial PPF 25 20 New PPF RUMSAplia Homework: Chapter 2 30 25 Initial PPF 20 A New PPF 15 DRUMS 10 5 2 3 5 6 CARS Suppose Andrew is currently using combination D, producing one car per day. His opportunity cost of producing a second car per day is per day. 1 drum e Andrew is currently using combination C, producing two cars per day. His opportunity cost of producing a third car per day is 3 drums per day. 16 drums vious analysis, you can determine that as Andrew increases his production of cars, his opportunity cost of producing one more car 19 drums Suppose Andrew buys a new tool that enables him to produce twice as many cars 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.O-lllt-l~l-Ii-i 01234557 CARS Suppose Andrew is currently using combination D, producing one car per day. His opportunity cost of producing a second car per day is V per day. Now, suppose Andrew is currently using combination C, producing two cars per day. His opportunity cost of producing a third car per day is V per day. .- - Because he can now make more cars per hour, Andrew's opportunity cost of producing drums is k ious analysis, you can determine that as Andrew increases his production of cars, his opportunity cost of producing one more car V ew buys a new tool that enables him to produce twice as many cars per hour as before, but it doesn't affect his ability to produce drums. points (triangle symbol) to plot his new PPF on the previous graph. V it was previously. Grade It Now Save 8: Continue Continue without saving l l } CARS l l LW. Suppose Andrew is currently using combination D, producing one car per day. His opportunity cost of producing a second car per day is V per day. Now, suppose Andrew is currently using combination C, producing two cars per day. His opportunity cost of producing a third car per day is V per day. From the previous analysis, you can determine that as Andrew increases his production of cars, his opportunity cost of producing one more car ______________E_- decreases ' increases remains constant I ' _ o ' . make more cars per hour, Andrew's opportunity cost of producing drums is v it was previously. Continue without saving s a new tool that enables him to produce twice as many cars per hour as before, but it doesn't affect his ability to produce drums. (triangle symbol) to plot his new PPF on the previous graph. Now, suppose Andrew is currently using combination C v per day. , producing two cars per day. His opportunity cost of producing a third car per day ls From the previous analysis, . you can determine that as Andrew increases his production of cars, his opportunity cost of producing one more car v _ K ' higher than Suppose Andrew buys a new tool that enables him to produce twice as many cars per hour as b:' lower than sn't affect his ability to produce drums. Use the green points (triangle symbol) to plot his new PPF on the previous graph. "' . K the same as Because he can now make more cars per hour, Andrew's opportunity cost of producing drums is V it was previously. Continue without saving ppose Andrew is currently using combination D, producing one car per day. His opportunity cost of producing a second car per day is V per day. Now, suppose Andrew is currently using combination C, producing two cars per day. His opportunity cost of producing a third car per day is V per day. From the previous analysis, you can determine that as Andrew increases his production of cars, his opportunity cost of producing one more car a V Suppose Andrew buys a new tool that enables him to produce twice as many cars 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, uclng drums is v it was previously. Continue without saving Because he can now make more cars per hour, Andrew's opportunity cost of prod