-Refer to the production possibility graph above.Assume that the economy is in equilibrium at point e.If the price of good B increases,the new equilibrium is most likely to be
A) point f.
B) point d.
C) point e.
D) point h.
E) point b.

Question

-Refer to the production possibility graph above.Assume that the economy is in equilibrium at point e.If the price of good B increases,the new equilibrium is most likely to be
A) point f. 
B) point d. 
C) point e. 
D) point h. 
E) point b.

Quizplus · Accepted Answer

If the price of good B increases, the economy will likely shift resources towards producing more of good B, moving the equilibrium towards point f, which represents a higher production of good B.

-Refer to the Production Possibility Graph Above