Opportunity cost and production possibilities Sharon is a talented artist who sells hand-crafted goods on her website. Sharon currently crafts and sells both knit caps and cutting boards. 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. Choice Hours Crafting Produced (Knit caps) (Cutting boards) (Knit caps) (Cutting boards) A8040 B62311 C44216 D26119 E08020 On the following graph, use the blue points (circle symbol) to plot Sharon'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 CUTTING BOARDS KNIT CAPS Suppose Sharon is currently using combination D, producing one knit cap per day. Her opportunity cost of producing a second knit cap per day is per day. Now, suppose Sharon is currently using combination C, producing two knit caps per day. Her opportunity cost of producing a third knit cap per day is per day. From the previous analysis, you can determine that as Sharon increases her production of knit caps, her opportunity cost of producing one more knit cap . Suppose Sharon buys a new tool that enables her to produce twice as many knit caps per hour as before, but it doesn't affect her ability to produce cutting boards. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more knit caps per hour, Sharon's opportunity cost of producing cutting boards is it was previously.