1. Suppose that the production possibilities for steel and food are as follows:
   
   

   Choice	Steel	Food
   A	0	100
   B	25	90
   C	50	70
   D	75	40
   E	100	0

   Both steel and food are measured in tons. Draw the production possibilities curve. How does this example illustrate increasing opportunity costs?
   
   
2. Suppose that economic growth allows us to produce more goods, so that the new production possibilities for steel and food are as follows:
   
   

   Choice	Steel	Food
   A	0	120
   B	25	115
   C	50	105
   D	75	90
   E	100	60
   F	125	0

   1. Draw the new production possibilities curve, and describe how the new curve is related to the old curve.
      
      
   2. Characterize the production of 75 tons of steel and 40 tons of food under the original and the new production possibilities curves.
      
      
3. Suppose that you must allocate your time between studying economics and studying physics. The percentage of time you spend studying economics and the grades you will get on the two exams are as follows:
   
   

   Percent of Time Studying Economics	Economics Grade	Physics Grade
   100	90	0
   80	88	40
   60	80	70
   40	70	80
   20	40	88
   0	0	90

   Draw the production possibilities curve. How does this example illustrate increasing opportunity costs?
   
   
4. Now suppose that, by using the study guide for economics, you are able to improve your choices as follows:
   
   

   Percent of Time Studying Economics	Economics Grade	Physics Grade
   100	100	0
   80	96	40
   60	90	70
   40	80	80
   20	50	88
   0	0	90

   1. Draw the new production possibilities curve, and describe how the new curve is related to the old curve.
      
      
   2. Characterize an economics grade of 80 and a physics grade of 70 under the original and the new production possibilities curves.