Attempts 1 l I Keep the Highest 1 l 5 17. Opportunity cost and production possibilities Charles is a talented artist who sells hand-crafted goods on his website. Charles currently crafts and sells both knit caps 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 (Knit caps) (Pillows) (Knitcaps) (Pillows) A B 0 4 0 B 6 2 3 9 C 4 4 2 13 D 2 6 1 16 E 0 8 0 17 \fSuppose Charles is currently using combination D, producing one knit cap per day. His opportunity cost of producing a second knit cap per day is per day. Now, suppose Charles is currently using combination C, producing two knit caps per day. His opportunity cost of producing a third knit cap per day is per day. From the previous analysis, you can determine that as Charles increases his production of knit caps, his opportunity cost of producing one more knit cap Suppose Charles buys a new tool that enables him to produce twice as many knit caps 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 knit caps per hour, Charles's opportunity cost of producing pillows is V it was previously