Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

How will the earthquake in Turkey affect the production possibility curve of their economy?

Options:

Production Possibility curve will shift rightward

Production Possibility curve will shift leftward

No change in Production Possibility curves

Production Possibility Curve can shift leftward and rightward both

Correct Answer:

Production Possibility curve will shift leftward

Explanation:

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.