Let me give it a try. The 1/2 time delay curve is chosen because it is the fastest. In the first part of the problem you are calculating for relay 2, which is the closest to the fault, so you want it to operate the quickest thereby isolating the smallest amount of line. In fact that's the whole concept of relay coordination - operating the closest relay and minimizing the outage area. By the way, time dial 1/2 coordinates to 0.1 sec. Next the problem calculates for relay 1. Since this relay is further away from the fault you want to give it more time to operate - thereby giving relay 2 a chance to operate. If relay 2 operates appropriately relay 1 does not have to operate at all. 0.3 seconds is added to relay 2's time of 0.1, resulting in 0.4 seconds. If you locate 0.4 seconds on the y axis, draw line parallel to x-axis until you reach 13.3 (I fault/I pickup) the closest time dial setting is 2. Time delay setting are at the discretion of the utility and I would think those would need to be stated in the test problem - assuming they are not giving you other info and asking you to solve for TD. I took the GA Tech course myself and the preceding pages do a decent job of breaking it down. Although I had to study those pages several times to attempt an answer to your question even after passing the test. Let me know if that helps. I also welcome any corrections from other EB members who maybe more proficient in relay coordination than I am. Which is highly possible.
