(Solved): 5. Opportunity cost and production possibilities Janet is a talented artist who sells hand-crafted ...

5. Opportunity cost and production possibilities Janet is a talented artist who sells hand-crafted goods on her website, Janet currently crafts and sells both picture frames and baskets. She spends 8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of her time is spent on each good. On the following graph, use the blue points (circle symbol) to plot Janet's initial production possibilities frontier (PPF). Suppose Janet is currently using combination. D, producing one picture frame per day. Her opportunity cost of producing a second picture frame per day is per day. Now, suppose Janet is currently using combination C, producing two picture frames per day. Her opportunity cost of producing a third picture frame per day is per day. From the previous analysis, you can determine that as Janet increases her production of picture frames, her opportunity cost of producing one more picture frame Suppose Janet buys a new tool that enables her to produce twice as many picture frames per hour as before, but it doesn't affect her abuly to produce baskets. Use the green points (triangle symbol) to plot her new ppF on the previous graph. Because she can now make more picture frames per hour, Janet's opportunity cost of producing baskets is it was previously.