Reference no: EM133552696

Question: Opportunity cost and production possibilities Sean is a talented artist who sells hand-crafted goods on his website. Sean currently crafts and sells both tea towels and pillows. He spends 8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of his time is spent on each good. Choice Hours Crafting Produced (Tea towels) (Pillows) (Tea towels) (Pillows) A 8 0 4 0 B 6 2 3 11 C 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 Sean's initial production possibilities frontier (PPF). Initial PPF New PPF 0 1 2 3 4 5 6 7 8 30 25 20 15 10 5 0 PILLOWS TEA TOWELS Suppose Sean is currently using combination D, producing one tea towel per day. His opportunity cost of producing a second tea towel per day is per day. Now, suppose Sean is currently using combination C, producing two tea towels per day. His opportunity cost of producing a third tea towel per day is per day. From the previous analysis, you can determine that as Sean increases his