explain what happens to a production possibilities curve if a natural disaster creates a scarcity of a key resource needed to make a product
If a natural disaster creates a scarcity of a key resource needed to make a product, the production possibilities curve will shift to the left. This means that the economy's ability to produce all goods and services will be limited by the shortage of the key resource.
As a result, the economy will have to allocate the limited resources available in a different way, which may result in a decrease in the production of certain goods and services. This could lead to a decrease in overall economic output and potential economic growth.
The decreased availability of the key resource may also lead to an increase in the price of the product that relies on that resource, as well as related products that use the same or similar resources. This could result in higher costs for consumers and businesses, potentially leading to inflation and decreased consumer spending.
Overall, the natural disaster-induced scarcity of a key resource can have significant economic implications, impacting production, consumption, and overall economic growth.