Consider a country that has two industries.In the north,they grow wild rice,which requires plenty of rainfall.In the south,they grow wheat,which requires a moderate amount of rainfall (too much rainfall is bad for wheat production).One year,there is a record rainfall.This results in
A)a parallel shift inward of the production possibilities frontier.
B)a parallel shift outward of the production possibilities frontier.
C)the production possibilities frontier rotating,with the wild rice intercept increasing,and the wheat intercept decreasing.
D)the production possibilities frontier rotating,with the wild rice intercept decreasing,and the wheat intercept increasing.
E)the production possibilities frontier becoming linear.

Question

Quizplus · Accepted Answer

The record rainfall would benefit the wild rice production in the north due to its high rainfall requirement, potentially increasing its output. Conversely, the wheat production in the south would suffer because it requires moderate rainfall, and excessive rain can be detrimental. This scenario would cause the production possibilities frontier (PPF) to rotate, reflecting an increase in the production potential for wild rice (increasing its intercept) and a decrease for wheat (decreasing its intercept), rather than shifting the entire PPF inward or outward or changing its shape to linear.

Consider a Country That Has Two Industries