Options for question 1: Graph 1, Graph 2 Options for question 2: remains the sam

Question

Options for question 1: Graph 1, Graph 2

Options for question 2: remains the same, increases, decreases

Suppose Sweden produces only flat-screen TVs and digital cameras. The resources that are used in the production of these two goods are specialized-that is, some resources are more suitable for producing flat-screen TVs whereas others are more suitable for producing digital cameras The following graphs show two possible prodution possibilities frontiers (PPFs) for Sweden's economy: a straight-line PP (PPF1) and a bowed-out PPF (PPF2) Graph 1 Graph 2 DIGITAL CAMERAS DIGITAL CAMERAS PPF1 PPF2 FLAT-SCREEN TVS FLAT-SCREEN TVS Based on the preceding description, the tradeoff Sweden faces between producing digital cameras and flat-screen TVs is best represented by The shape of the PPF reflects the fact that as Sweden produces more flat-screen TVs and fewer digital cameras, the opportunity cost of producing each additional flat-screen TV

Explanation / Answer

Question 1-Graph 2

Graph 2 represent increasing opportunity cost as goods are transferred from one good to another.However,in good 1 the opportunity cost remains constant which shows that resources are equally suitable for both goods.

Question 2-Increases

As more of a good is produced it's opportunity cost increases as well.

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