Resource X is necessary to the production of good Y.If the price of resource X falls,
A) the supply curve of Y shifts leftward.
B) the supply curve of Y shifts rightward.
C) the supply curve of Y is unaffected.
D) there is a movement down the supply curve of Y.
E) there is a movement up the supply curve of Y.

Question

Quizplus · Accepted Answer

When the price of resource X falls, it becomes cheaper for producers to acquire the resource, which decreases the cost of production for good Y. This leads to an increase in the supply of good Y, as producers can now create more units of the good for the same cost. Therefore, the supply curve shifts rightward.

Resource X Is Necessary to the Production of Good Y