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Suppose Bulgaria produces only camcorders and trucks. The resources that are used in the production of these two goods are specialized—that is, some inputs are more suitable for producing camcorders than for producing trucks, whereas others are more suitable for producing trucks than camcorders. The shape of Bulgaria’s production possibilities frontier (PPF) should reflect the fact that as Bulgaria produces more trucks and fewer camcorders, the opportunity cost of producing each additional truck.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91703923

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