Guns	Butter (Pounds)
0	40
12	36
23	30
32	21
40	11
47	0

Production Possibilities Question 1: Draw or construct a Production Possibilities Curve based on the following Production Possibilities Schedule in table^^

Question 2: What are the assumptions behind the above production possibilities curve? Question 3: Explain the shape of the curve. Question 4: Calculate the opportunity cost of moving production from 0 guns to 12 guns. Question 5: Calculate the opportunity cost of moving production from 11 pounds of butter to 21 pounds of butter. Question 6: What two central facts of economic life (in the neoclassical view) are displayed by the curve? Question 7: What could cause a shift out of the production possibilities curve? What is the economic meaning of such a shift?