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

Question

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

Quizplus · Accepted Answer

An increase in labor supply due to immigration would likely shift the production possibility frontier outward, allowing the economy to produce more goods. Point h, being outside the original curve, represents a new equilibrium with increased production capacity.

-Refer to the Production Possibility Graph Above