Question

Using a diagram, explain what will happen to the PPC of Bihar if the river Kosi causes widespread floods?

Answer 1

Widespread floods caused by the river Kosi will lead to the destruction of resources such as land, machinery and infrastructure in Bihar. This will reduce the production capacity of the state. As a result, the Production Possibility Curve (PPC) will shift leftward (inward) from PPC₁ to PPC₂, indicating a decrease in the maximum possible production of both goods.