Draw the PPF for a country which produces just oranges and cars. Assume that the country is better at producing oranges than cars.

a. What can you say about the opportunity cost of the country diverting more resources into producing cars?

b. The country discovers new resources which will mean that its ability to produce cars is significantly improved. What happens to the shape of the PPF as a result of this discovery?

c. What can you say about the opportunity cost facing the country after this new discovery?