1. The production possibilities curve is drawn in Figure 1.9. The example illustrates increasing opportunity costs because, as you move down the table or up the curve, each additional 25 tons of steel comes at a higher cost in food production.

Figure 1.9

2. a. The new production possibilities curve, labeled "Growth," is drawn with the original production possibilities curve in Figure 1.10. The new curve shifts out from the old curve.

Figure 1.10

b. Production of 75 tons of steel and 40 tons of food was efficient under the original production possibilities curve. It is inefficient under the new curve.

3. The production possibilities curve is drawn in Figure 1.11. Each additional point on your physics grade comes at a cost of more and more points on your economics grade.

Figure 1.11

4. a. The new production possibilities curve, labeled "Study Guide," and the original curve are depicted in Figure 1.12. The new curve is above the original curve, but it tilts out rather than shifting out.

Figure 1.12

b. An economics grade of 80 and a physics grade of 70 were efficient with the original production possibilities curve, but this combination is now inefficient.