-1. How does the production possibilities frontier illustrate opportunity cost and scarcity?

-2. Why might opportunity costs increase rather than stay the same as an economy produces more and more of the same product?

-3. How do the numbers in the table below which represent a Production Possibilities Frontier exhibit Increasing Opportunity Costs? Calculate the opportunity cost of producing one more automobile in terms of lost corn between points A and B, points B and C, points C and D, and points D and E. Do you think this Production Possibilities Frontier would show a curved, bowed out shape if you graphed it?

Table of Production Possibilities

Production of:A B C D E

Tons of Corn: 70 60 45 25 0

Automobiles: 0 1 2 3 4

-4. How can excess unemployment and waste of resources be illustrated in the production possibilities frontier model?

-5. If an economy experiences growth, whether through an increase in resources or an improvement in technology, how can this be modeled in the production possibilities framework?