A major earthquake occurs in the central part of the United States.What impact would this have on the nation's production possibilities frontier and why?
A)A tradeoff would occur to replace the resources and goods destroyed.
B)It would shift outward because unemployment would be reduced.
C)It would not shift because people would get to work to replace any capital that was destroyed.
D)Nothing would happen because the nation would still have the same capabilities.
E)It would shift inward because some of the nation's resources,such as capital and labour,would be destroyed.

Question

Quizplus · Accepted Answer

A major earthquake would likely damage or destroy capital resources and potentially result in the loss of labor resources as people succumb to the natural disaster. This would reduce the total amount of resources available in the economy and therefore shift the production possibilities frontier inward. The economy would need to divert resources away from other uses in order to rebuild and repair the damage caused by the earthquake.

A Major Earthquake Occurs in the Central Part of the United