Below, you are provided four points that lie alongCanada'sProduction Possibilities Frontier between sweaters and shirts. You will use this information to constructCanada's PPF, and to examine how the opportunity cost ofproducing an additionalunit of each good changes as you move along Canada's PPF.

Point Shirts Sweaters (in thousands) (in thousands)

A 0 210 B 90 180 C 150 90 D 180 0

Part 1: In the graph below, plot each of the four points listed above. Label these pointsA,B,C, andD. ConstructCanada'sProduction Possibilities Frontier by connecting pointsA,B,C, andD.

210

180 150 120

90 60 30

30 60 90 120 150 180 210

Shirts (in thousands)

Part 2: Suppose that Canada increases its production of sweaters from 0 sweater to 90 sweaters. What is the opportunity cost of producing an additional sweater?

2018 Pearson Education, Inc.

Sweaters (in thousands)

Name:______________________________________ Student ID:________________ Section:_______

Part 3: Suppose that Canada increases its production of sweaters from 90 sweaters to 180 sweaters. What is the opportunity cost of producing an additional sweater?

Part 4: Does Canada's production of sweaters experience constant or increasingopportunity costs?

Part 5: Suppose that Canada increases its production of shirts from 90 shirts to 150 shirts. What is the opportunity cost of producing an additional shirt?

Part 6: Suppose that Canada increases its production of shirts from 150 shirts to 180 shirts. What is the opportunity cost of producing an additional shirt?

Part 7: Does Canada's production of shirts experience constant or increasingopportunity costs?