Suppose you have the following information on Islandland's production possiblity.

• Islandland has 30000 labor hours available each year.
• Producing cars requires 500 hours.
• Producing tablets requires 100 hours.

Part A

Use this information to complete the table below. For Bundle A assume Islandland spends all labor hours producing cars. For Bundle B assumesIslandland spends 75% of labor hours producing cars and the remaining 25% on tablets. For Bundle C assume Islandland spends 25% of labor hours producing cars and the remaining 75% on tablets. For Bundle D assume Islandland spends 100% of labor hours producing tablets.

Round any answers 1 decimal place (example: 35.5).

BundlesABCDCarsTablets

Part B

Suppose a new technology allows for a reduction in the number of labor hours. Under the new technology it now requires only 250 hours to produce a car and 50 hours to produce a tablet. How does this change the Production Schedule (assume the same percentages of labor hours for each bundle)?

Round any answers 1 decimal place (example: 35.5).

Bundles New TechnologyABCDCarsTablets

Part C

Which of the graphs below best depicts the effect of new technology on the Production Possibility Curve?

• Graph B
• Graph D
• Graph A
• Graph C