5. Opportunity cost and production possibilities Hubert is a skilled toy maker who is able to produce both boats and kites. He has 8 hours a day to produce toys. The following table shows the daily...

Extracted text: 5. Opportunity cost and production possibilities Hubert is a skilled toy maker who is able to produce both boats 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. Hours Producing Produced Choice (Вoats) (Kites) (Вoats) (Kites) A 8 4 B 6 2 3 9 4 4 2 13 D 6. 1. 16 E 8 17


Extracted text: On the following graph, use the blue points (circle symbol) to plot Hubert's initial production possibilities frontier (PPF). 30 25 Initial PPF 20 New PPF 15 10 5 1 3 4 BOATS Suppose Hubert is currently using combination D, producing one boat per day. His opportunity cost of producing a second boat per day is v per day. Now, suppose Hubert is currently using combination C, producing two boats per day. His opportunity cost of producing a third boat per day is per day. From the previous analysis, you can determine that as Hubert increases his production of boats, his opportunity cost of producing one more boat Suppose Hubert buys a new tool that enables him to produce twice as many boats 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 boats per hour, Hubert's opportunity cost of producing kites is v it was previously. KITES