5. Opportunity cost and production possibilities Kenji is a skilled toy maker who is able to produce both cars and kites

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5 Opportunity Cost And Production Possibilities Kenji Is A Skilled Toy Maker Who Is Able To Produce Both Cars And Kites 1 (27.69 KiB) Viewed 38 times

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5. Opportunity cost and production possibilities Kenji is a skilled toy maker who is able to produce both cars and kites. 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 (Cars) (Kites) 8 0 6 2 Produced (Cars) (Kites) 4 0 A B 3 9 с 4 4 2 15 D 2 6 1 17 E O 0 18 On the following graph, use the blue points (circle symbol) to plot Ken's initial production possibilities frontier (PDF)
On the following graph, use the blue points (circle symbol) to plot Kent's initial production possibilities frontier (PPF). ? 30 25 Initial PPF A 20 New PPE KITES 15 10 5 0 2 CARS
Suppose Kenji is currently using combination D, producing one cor per day. His opportunity cost of producing a second car per day is per day Now, suppose Kenji is currently using combination C, producing two cars per day. His opportunity cost of producing a third car per day is per day From the previous analysis, you can determine that as Kenji Increases his production of cers, his opportunity cost of producing one more car Suppose Keni buys a new tow that enables him to produce twice as many cars per hour as before, but it doesn't affect is abouty to produce, kites. Use the green points (triangle symbol) to plotis new PPF on the previous graph Because he can now make more cats per hour, Kenji's opportunity cost of producing kitesi it was previously