In 1991, for a short time, Iraq invaded Kuwait and seized its oil fields. During that time, what impact, if any, did the invasion have on Iraq's production possibilities frontier?
A. The production possibilities frontier remained stable.
B. The production possibilities frontier reached its maximum.
C. The production possibilities frontier shifted to the left.
D. The production possibilities frontier shifted to the right.
1 answer
The best answer is:
D. The production possibilities frontier shifted to the right.
During the invasion, if Iraq successfully seized Kuwait's oil fields, it would likely have gained access to additional resources (oil), which could enhance its production capacity. This increase in resources would shift the production possibilities frontier (PPF) to the right, indicating a potential for increased output of goods and services.
