1. the supply curve for potatoes in Ireland to shift to the left.
2. the supply curve for potatoes in Ireland to become upward sloping rather than horizontal.
3. the supply curve for potatoes in Ireland to become flatter.
4. both 1 and 2 above to occur.
Choose the option that yields the correct answer.
The correct answer is option 1. The blight had the effect of reducing the quantity of potatoes that could be produced from the land using the same quantities of labor and capital inputs as before, thereby increasing the cost of producing each level of output of potatoes and shifting the supply curve of potatoes upward. Since there will be diminishing returns to the application of labor and capital on land in producing potatoes the supply curve will be upward sloping. The blight can therefore also be viewed as shifting this supply curve to the left.
It is impossible to say definitively whether the blight will make the supply curve of potatoes steeper or flatter. But it is certain, diminishing returns undoubtedly being present, that the supply curve of potatoes was not horizontal to begin with.