1. the supply curve of canola in that province to shift upward.
2. the supply curve of wheat in that province to shift upward.
3. the supply curve of wheat in that province to shift downward.
4. the supply curve of wheat in that province to become steeper.
Choose the option that yields the correct answer.
Option 2 is the correct one. An expansion of canola production must inevitably use land that would otherwise have been devoted the production of wheat. This means that less land will be used for wheat production and, given diminishing returns, more labor and capital will be required to produce the same output of wheat as before. The costs of producing wheat will thus rise at each level of wheat output and the supply curve of wheat will shift upward.
The supply curve of canola will not shift upward in response to increased production of canola because an expansion of output of a product involves a movement along the supply curve for that product, not a shift of it. It is not clear whether the increase in production of canola will cause the supply curve for wheat to become steeper or flatter.
Also, the underlying assumption that the weather did not change is crucial. Good weather would increase the output of canola without drawing resources away from wheat production. In this case, however, none of the above four options would be correct.