8. The graph below shows a production possibilities curve for an economy that produces only two goods-skateboards and bicycles. a (0,40) 40 Skateboards 35- 30- 25- 20- 15- 10- 5- 0 O b (1, 38) c (2, 32) 2 Bicycles ed (3, 20) 3 e (4,0) 4 a. Calculate the opportunity cost of bicycles in terms of skateboards when the economy moves from point b to c. What is the new opportunity cost for bicycles when the economy moves from point c to d? Do your answers illustrate the law of increasing opportunity costs? b. Can the economy produce 38 skateboards and two bicycles? Why or why not? c. If 32 skateboards and one bicycle are produced, how would you describe produc- tion in this economy? d. Describe how a technological improvement in the assembly of bicycles would affect the production possibilities curve. e. Describe how an increase in the economy's supply of labour would affect the production possibilities curve.