How will the earthquake in Turkey affect the production possibility curve of their economy?
Answer & explanation
Correct answer: option 2
An earthquake in Turkey would likely cause the production possibility curve (PPC) of their economy to shift leftward. This is because earthquakes can cause widespread damage to infrastructure, such as roads, bridges, and factories, which can disrupt production and reduce the economy's potential output. Additionally, earthquakes can cause disruptions to supply chains and labor markets, which can further reduce economic output. This would cause the production possibility curve to shift leftward.