Below is s production possibilities table for the consumer goods (automobiles) and capital goods (forklifts):

Type of production production Alternatives

ABCDE

Automobile02468

Forklifts302721120

1. Show these data graphically. Upon what specific assumptions is this production possibilities curve based?

1. If the economy is at point C, what is the cost of one more automobile? Of one more

forklift? Explain how the production possibilities curve reflects the law of increasing

opportunity costs.(2Marks)

1. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 fork lifts, what could you conclude about its use of available

resources?(2Marks)

3.What could production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production?(2Marks)