Question

Musashi is a skilled toy maker who is able to produce both cars and balls. he has 8 hours a day to produce toys. the following table shows the daily output resulting from various combinations of his time.

on the following graph, use the blue points (circle symbol) to plot musashi's initial production possibilities frontier (PPF)

 Suppose Clancy is currently uğing combination D, producing one truck per day. His opportunity cost of producing a second truck per day is _______  per day.

 Now, suppose Clancy is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is _______  per day.

 From the previous analysis, you can determine that as Clancy increases his production of trucks, his opportunity cost of producing one more truck _______ 

 Suppose Clancy 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 kites.

 Use the green points (triangle symbol) to plot his new PPF on the previous graph.

 Because he can now make more trucks per hour, Clancy's opportunity cost of producing kites is _______  it was previously.

Answer 1

Initial PPF = last 2 columns

New PPF = First and last column

Blanks-

1) 15-13 = 2 balls

2) 13-8 = 5 balls

3) increases

4) higher than