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Question: 5 opportunity cost and production possibilities sam is a skilled...

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5. Opportunity cost and production possibilities Sam is a skilled toy maker who is able to produce both boats 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 (Boats) (Drums) (Boats) (Drums) 4 12 17 19 20 4 4 6 ES 20On the following graph, use the blue points (circle symbol) to plot Sams initial production possibilities frontier (PPF) 30 エ 25 Initial PPF 20 New PPF 15 10 焦 w BOATSSuppose Sam is currently using combination D, producing one boat per day. His opportunity cost of producing a second boat per day is per day Now, suppose Sam 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 Sam increases his production of boats, his opportunity cost of producing one more boat Suppose Sam buys a new tool that enables him to produce twice as many boats per hour as before, but it doesnt affect his ability to produce drums. Use the green points (triangle symbol) to plot his new PPF on the previous graph Because he can now make more boats per hour, Sams opportunity cost of producing drums is it was previously.

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