The diagram below shows two production possibilities boundaries for Country X.
FIGURE 1- 4
-Consider Canada's production possibilities boundary.Suppose fire destroys many millions of hectares of valuable Canadian forest.The effect on the Canadian economy would be best illustrated by the production possibilities boundary.
A)a shift outward of
B)a movement to a point beyond
C)a movement inside
D)an inward shift of
E)a movement along

Question

The diagram below shows two production possibilities boundaries for Country X.
  FIGURE 1- 4
-Consider Canada's production possibilities boundary.Suppose fire destroys many millions of hectares of valuable Canadian forest.The effect on the Canadian economy would be best illustrated by the production possibilities boundary.
A)a shift outward of 
B)a movement to a point beyond 
C)a movement inside 
D)an inward shift of 
E)a movement along

Quizplus · Accepted Answer

The destruction of many millions of hectares of valuable Canadian forest would lead to a decrease in Canada's natural resources, which would result in a decrease in its production capacity. This would cause an inward shift of Canada's production possibilities boundary as the country would be able to produce fewer goods and services than before.

The Diagram Below Shows Two Production Possibilities Boundaries for Country