Question

3. Opportunity cost and production possibilities Becky 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 output resulting from various possible combinations of her time Hours ProducingProduced Choice (Cars) (Balls) (Cars) (Balls) 2 10 16 18 19

Answer 1

At combination D, producing one car per day, her opportunity cost of producing a second car per day is 2 Balls per day (18-16)
At combination C, producing two cars per day, her opportunity cost of producing a third car per day is 6 Balls per day (16-10)
From the previous analysis, you can determine that as Becky increases her production of cars per day, her opportunity cost of producing one more car increases
Becky’s opportunity cost of producing balls is lesser than it was previously