Question

If any natural calamity occured , what will happen to PPF?

• A. No change
• B. Shift rightwards
• C. Shift leftwards
• D. It will become a straight line

Answer 1

Answer: (C)

Shift leftwards

Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.

When the resources are reduced due to some reason like natural calamity in the economy then the production of commodities also decreases as they use these resources to develop the commodities. Therefore, if the production of the commodities decreases it leads to leftward shift in the production possibility curve.