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Suppose China produces only tablets and smartphones. The resources that are used in the production of these two goods are not specialized-that is, the same
Suppose China produces only tablets and smartphones. The resources that are used in the production of these two goods are not specialized-that is, the same set of resources is equally useful in producing both smartphones and tablets. The shape of China's production possibilities frontier (PPF) should reflect the fact that as China produces more smartphones and fewer tablets, the opportunity cost of producing each additional smartphone The following graphs show two possible PPFs for China's e decreases ine PPF (PPF1 ) and a bowed-out PPF (PPF2). increases remains constant ? Graph 1 Graph 2 PPF. PPF ABLETS ABLETS
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