Consider a Country That Has Two Industries

question 98

Multiple Choice

Consider a country that has two industries.In the north,they grow wild rice,which requires a lot of rainfall.In the south,they grow wheat,which requires just a moderate amount of rainfall (too much rainfall is bad for wheat production) .One year,there is a record rainfall.This will result 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 swiveling, with the wild rice intercept increasing, and the wheat intercept decreasing.
• D)the production possibilities frontier swiveling, with the wild rice intercept decreasing, and the wheat intercept increasing.
• E)none of the above.