1. We have studied the idea of production possibilities and the production possibilities curve by using graphs. We will first consider the same two concepts using numerical examples and then see how we can combine graphs and numbers.
   
   
   1. Suppose that the production possibilities for steel and food are as follows:
      
      

      Choice	Steel	Food
      A	0	100
      B	25	95
      C	50	85
      D	75	50
      E	100	0

   Both steel and food are measured in tons. Increasing opportunity costs are illustrated by moving down the table. As we move from row to row, steel production increases by the same amount, 25 tons. The decline in food production, in contrast, gets larger, going from 5 tons between the first and second rows to 50 tons between the fourth and fifth rows. Each extra 25 tons of steel requires a loss of more and more food.
   
   
2. The production possibilities curve for these numbers is depicted in Figure 1.3, with steel on the vertical axis and food on the horizontal axis. Both axes are measured in tons. The production possibilities curve is constructed by plotting pairs of points, labeled points A through E, for steel and food, and then connecting the dots. Since we do not know exactly how much food can be produced in between the 25-ton intervals for steel, we use straight lines to connect the dots.
   
   

   Figure 1.3

   
   
3. We have learned that economic growth shifts out the production possibilities curve. We will illustrate this with a numerical example. 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	125
   B	25	120
   C	50	110
   D	75	90
   E	100	50
   F	125	0

   The new production possibilities curve, labeled "Growth," is drawn with the original production possibilities curve in Figure 1.4. The new curve is farther away from the origin than the original curve at all points, indicating that more can be produced. For example, food production of 90 tons and steel production of 75 tons was impossible with the original production possibilities curve. After growth, that point is on the new production possibilities curve, and is therefore efficient.
   
   

   Figure 1.4