Consider a Country That Has Two Industries

question 40

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 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.

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Definitions:

Increase

An upward movement in quantity, size, value, or some other measure, indicating growth or escalation.

Local Market

A market in which goods and services are bought and sold within a specific geographic area, often reflecting the preferences and characteristics of the local population.

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply at various prices.

Commodity Increases

Refers to a rise in the quantity supplied or demanded of a good or service, often due to factors like price changes, improvements in technology, or shifts in consumer preferences.