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