below is a production possibilities schedule for a hypothetical company that produces only two goods - skateboards and bicycles

production scenario skateboards bicycles

A 40 0

B 38 1

C 32 2

D 20 3

E 0 4

a) graph the production possibilities curve, putting skateboards on the vertical axis and bicycles on the horizontal axis. what shape does this new curve have?

b) calculate the opportunity cost of bicycles in terms of skateboards when the economy moves from:

i. point B to C

ii. point C to D

c) do the answers above illustrate the law of increasing opportunity cost? why or why not?

d) if 32 skateboards and 1 bicycle are produced, how would you describe production in this economy?

e) on your graph, show how a technological improvement in the assembly of bicycles would affect the production possibilities curve

f) on your graph show how an increase in the economy's supply of labour would affect the production possibilities curve