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Suppose Saudi Arabia produces only scooters and bikes. The resources that are used in the production of these two goods are not specialized-that is, the

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Suppose Saudi Arabia produces only scooters and bikes. The resources that are used in the production of these two goods are not specialized-that is, the same set of resources is equally effective at producing both bikes and scooters. The shape of Saudi Arabia's production possibilities frontier (PPF) should reflect the fact that as Saudi Arabia produces more bikes and fewer scooters, the opportunity cost of producing each additional bike The following graphs show two possible PPFs for Saudi decreases a straight-line PPF (PPF1 ) and a bowed-out PPF (PPF2). increases remains constant Graph 1 Graph 2 PPF ? PPF SCOOTERS SCOOTERS BIKES BIKES

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