Question
This is the problem I'm having problems with that I am not understanding: Charles is a skilled toy maker who is able to produce both
This is the problem I'm having problems with that I am not understanding:
Charles is a skilled toy maker who is able to produce both trucks and balls. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time.
Choice Hours Producing Produced
(Trucks) (Balls) (Trucks) (Balls)
A 8 0 4 0
B 6 2 3 10
C 4 4 2 14
D 2 6 1 17
E 0 8 0 18
On a graph, use the blue points (circle symbol) to plot Charles's initial production possibilities frontier (PPF).
30
25
Balls 20
15
10
5
0 1 2 3 4 5 6 7 8
Trucks
Suppose Charles is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck is 1, 3, 14, or 17 balls per day?
Now, suppose Charles is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck is 1, 4, 10 or 14 balls per day?
From the previous analysis, you can determine that as Charles increases his of trucks, his opportunity cost of producing one more truck decreases, increases or remains constant?
Suppose Charles buys a new tool that enables him to produce twice as many trucks per hour as before, but it doesn't affect his ability to produce balls. Use the same graph to plot his new PPF.
Because he can now make more trucks per hour, Charles's opportunity cost of producing balls is higher than, lower than, or the same as it was previously?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started