Question

Due to cyclonic effect in an area, the sea level covers a number of rice fields in that area. This reduces productivity of land. How will this affect the supply curve of rice of that region?

Options

• Downward movement along the supply curve

• Supply curve shifts to the leftward side

• Upward movement along the supply curve

• Supply curve shifts to the rightward side

Answer 1

Supply curve shifts to the leftward side

Explanation:

When a cyclone damages rice fields and reduces productivity, the supply of rice decreases at all price levels. As a result, the entire supply curve shifts to the left, indicating a fall in supply. This represents a shift of the supply curve, not a movement along it.