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

Quizplus · Accepted Answer

If the price of good A increases, the economy will likely produce more of good A and less of other goods, moving the equilibrium towards point d, which represents a higher production of good A.

-Refer to the Production Possibility Graph Above