Opportunity cost and production possibilities Valerie is a skilled toy maker who is able to produce both trains and kites. 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 (Trains) (Kites) (Trains) (Kites) A 8 0 4 0 B 6 2 3 10 с 4 4 2 16 D 2 6 1 19 E 0 8 0 20 On the following graph, use the blue points (circle symbol) to plot Valerie's initial production possibilities frontier (PPF). ? 30 25 20 15 10 5 0 3 5 0 1 2 4 6 7 8 TRAINS Suppose Valerie is currently using combination D, producing one train per day. Her opportunity cost of producing a second train per day is per day. Now, suppose Valerie is currently using combination C, producing two trains per day. Her opportunity cost of producing a third train per day is per day. From the previous analysis, you can determine that as Valerie increases her production of trains, her opportunity cost of producing one more train Suppose Valerie buys a new tool that enables her to produce twice as many trains per hour as before, but it doesn't affect her ability to produce kites. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more trains per hour, Valerie's opportunity cost of producing kites is it was previously. Initial PPF A New PPF