Suppose Eileen is currently using combination D, producing one car per day. Her opportunity cost of producing a second car per day is ____ per day.

a) 1 ball

b) 3 balls

c) 15 balls

d) 18 balls

Now, suppose Eileen is currently using combination C, producing two cars per day. Her opportunity cost of producing a third car per day is____ per day.

a) 1 ball

b) 4 balls

c) 11 balls

d) 15 balls

From the previous analysis, you can determine that as Eileen increases her production of cars, her opportunity cost of producing one more car _____.

a) Decreases

b) Increases

c) Remains constant

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

Because she can now make more cars per hour, Eileen's opportunity cost of producing balls is ______it was previously.

a) Higher than

b) Lower than

c) The same as

Transcribed Image Text:

Elleen is a skilled toy maker who is able to produce both cars and balls. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time. Hours Producing Produced Choice (Cars) (Balls) (Cars) (Balls) A 8 B 6 2 3 11 4 4 15 D. 2 6. 1 18 19 Elleen is a skilled toy maker who is able to produce both cars and balls. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time. Hours Producing Produced Choice (Cars) (Balls) (Cars) (Balls) A 8 B 6 2 3 11 4 4 15 D. 2 6. 1 18 19

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Answer 30 25 Intial PPF 20 New PPF 15 Initial ppf New ppf 10 1 7 CARS When we lose other alternati... View the full answer