4. Opportunity cost and production possibilities Juanita is a skilled ton,r maker who is able to produce both trains and drums. She has 8 hours a dang:r to produce toys. The following table shows the daily' output resulting from various possible combinations of her lime. Hours Producing Produced Choice (Trains) (Drums) (Trains) (Drums) A. B 0 4 E] B 6 2 3 10 C 4 4 2 16 D 2 6 1 13 E D 8 D 19 On the following graph, use the blue points {circie symbol) to pier Juanita 's initiai production possibiiities frontier ['PPF). 30 O 25 Initial PPF A 20 New PPF DRUMS 15 10 0 2 3 5 8 7 CO 0 1 4 TRAINSSuppose Juanita is currentlyr using combination D, producing one train per day. Her opportunity cost of producing a second train per day is 7 per day. Now, suppose Juanita is currentlyr using combination C, producing two trains per day. Her opportunity cost of producing a third train per day is V per day. From the previous analysis, you can determine that as Juanita increases her production of trains, her opportunity cost of producing one more train 7 Suppose Juanita buys a new tooi that enabies her to produce twice as many trains per hour as before, but it doesn't aect her ability to produce dmms. Use the green points (triangle symboi) to plot her newr PPF on the previous graph. Because she can now make more trains per hour, Juanita's opportunity cost of producing drums is 7 it was previousiv. Suppose Juanita is currently using combination D, producing one train per clay. Her opportunity cost of producing a second train per day is 7 per day. Now, suppose Juanita is currentlyr using combination C. producing two trains per day. Her opportunity cost of producing a third train per dayr is v per day. From the previous analysis, you can determine that as Juanita increases her production of trains, her opportunity cost of producing one more train 7 higher than Suppose Juanita buys a new too! that enables her to produce twice as many trains per hour as be' lower than 't afact her ability to produce drums. Use the green points {triangi'e symbol} to piot her new PPF on the previous graph. the same as Because she can now make more trains per hour, luanita's opportunity Dost of producing drurns is 7 it was previously