CENGAGE | MINDTAP Module One Quiz Back to Assignment Attempts Krup the Highest / 5 4. Opportunity cost and production possibilities Kenji is a skilled toy maker who is able to produce both cars and drums, He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Hours Producing Produced Choice (Cars) (Drums) (Cars) (Drums) A 16 mon 2 10 20 On the following graph, use the blue points (circle symbol) to plot Kenji's initial production possibilities frontler (PPF]. (?) O Initial PPF New PPF DRUMS CARS Suppose Kenji is currently using combination D. producing one car per day. His opportunity cost of producing a second car per day is 7 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 7 per day. From the previous analysis, you can determine that as Kenji increases his production of cars, his opportunity cost of producing one more car Suppose Kenji buys a new tool that enables him to produce twice as many cars per hour as before, but it doesn't affect his ability to produce drums. Use the green points (triangle symbol) to plot his new PPP on the previous graph. Because he can now make more cars per hour, Kenji's opportunity cost of producing drums is 7 it was previously