AS Paper 1, June 2024Introduction to Markets and Market Failure
AS Paper 1, June 2024, Q2(b)
The diagrams below show movements from position X to Y on production possibility frontiers. In which one of the diagrams does the movement from X to Y illustrate the most likely impact on Madagascar’s economy of a natural disaster such as a cyclone?
Multiple choice1 mark
Context
Vanilla bean prices increased to a record $600 a kilogramme in 2018 after a cyclone hit the tropical island of Madagascar, damaging crops. Madagascar supplies 75% to 80% of the world vanilla bean market.
ADiagram A
BDiagram B
CDiagram C
DDiagram D