Question

Which of the following best illustrates the effect on the supply curve when a natural disaster causes greater scarcity of resources?

A.an outward shift of the supply curve
B.movement to the right on the same supply curve
C.movement to the left on the same supply curve
D.an inward shift of the supply curve

Answer 1

An inward shift of the supply curve best illustrates the effect on the supply curve when a natural disaster causes greater scarcity of resources.

Step-by-step explanation:

When a natural disaster causes greater scarcity of resources, it has an effect on the supply curve. The correct answer is D. an inward shift of the supply curve.

A natural disaster, such as a drought, can lead to a decrease in the availability of resources for production. This causes a decrease in the overall supply of goods and services in the market. When the supply curve shifts inward, it means that the quantity supplied at each price level has reduced.

For example, if a drought affects agriculture and reduces crop yields, farmers will have fewer goods to sell in the market. As a result, the supply curve shifts inward, indicating a decrease in the quantity supplied at each price level.