Suppose you own an outdoor recreation company and you want to purchase all-terrain vehicles (ATVs) for your summer business and snowmobiles for your winter business. Your budget for new vehicles this year is $240 000. ATVs cost $8000 each and snowmobiles cost $12 000 each.

a. Draw the budget line for your purchase of new vehicles.

b. What is the opportunity cost of one ATV?

c. What is the opportunity cost of one snowmobile? d. Does the opportunity cost of one ATV depend on how many you purchase? Why or why not?