Suppose Thailand produces only bikes and scooters. The resources that are used in the production of these two goods are not specializedthat is, the same set of resources is equally effective at producing both scooters and bikes.

The shape of Thailand's production possibilities frontier (PPF) should reflect the fact that as Thailand produces more scooters and fewer bikes, the opportunity cost of producing each additional scooter .

The following graphs show two possible PPFs for Thailand's economy: a straight-line PPF (PPF1PPF1) and a bowed-out PPF (PPF2PPF2).

A panel labeled Graph 1 shows a P P F for Thailand with bikes on the vertical axis and scooters on the horizontal axis. Graph 1 plots a straight-line P P F labeled P P F 1.

Graph 1BIKESSCOOTERSPPF1

A panel labeled Graph 2 shows a P P F for Thailand with bikes on the vertical axis and scooters on the horizontal axis. Graph 2 plots a concave, bowed-out P P F labeled P P F 2.

Graph 2BIKESSCOOTERSPPF2

Based on the previous description, the trade-off Thailand faces between producing scooters and bikes is best represented by .