The correct answer is option 2: Production Possibility curve will shift leftward.

Reason: The impact of an earthquake on an economy is typically negative, as it can damage infrastructure, disrupt production, and cause economic losses. As a result, it is likely to shift the production possibility curve leftward.

Here, the exact impact on the PPC depends on the magnitude of the earthquake and the response of the government and businesses, it is typically associated with a leftward shift of the PPC, indicating a reduction in the economy's capacity to produce goods and services.