ppose Susan is currently using combination D, producing one crochet hat per day. Her opportunity cost of producing a second crochet hat per day is per day.

Now, suppose Susan is currently using combination C, producing two crochet hats per day. Her opportunity cost of producing a third crochet hat per day is per day.

From the previous analysis, you can determine that as Susan increases her production of crochet hats, her opportunity cost of producing one more crochet hat .

Suppose Susan buys a new tool that enables her to produce twice as many crochet hats per hour as before, but it doesn't affect her ability to produce cutting boards. Use the green points (triangle symbol) to plot her new PPF on the previous graph.

Because she can now make more crochet hats per hour, Susan's opportunity cost of producing cutting boards is it was previously.

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