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Suppose Norway produces only pressure cookers and bikes. The resources that are used in the production of these two goods are specializedthat is, some resources

Suppose Norway produces only pressure cookers and bikes. The resources that are used in the production of these two goods are specializedthat is, some resources are better suited for producing pressure cookers than bikes, whereas others are better suited for producing bikes than pressure cookers. The shape of Norway's production possibilities frontier (PPF) should reflect the fact that as Norway produces more bikes and fewer pressure cookers, the opportunity cost of producing each additional bike . The following graphs show two possible PPFs for Norway's economy: a straight-line PPF (PPF1 PPF 1 ) and a bowed-out PPF (PPF2 PPF 2 )

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