Suppose drought destroys many millions of acres of valuable Canadian farmland. The effect on the Canadian economy would be to move
A)its production possibilities boundary inward.
B)it beyond its production possibilities boundary.
C)it along its production possibilities boundary.
D)its production possibilities boundary outward.
E)none of the above. There would be no change in Canada's production possibilities boundary.

Question

Quizplus · Accepted Answer

Drought destroying many millions of acres of valuable Canadian farmland would mean a decrease in the available inputs (land) for production. This would result in a decrease in the potential output of goods and services, causing the production possibilities boundary to move inward.

Suppose Drought Destroys Many Millions of Acres of Valuable Canadian