Question

Resource X is necessary to the production of good Y. If the price of resource X rises, the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y.

Answer 1

Answer:

Supply

To the left or inward

Increase

Decrease

Explanation:

If the cost of a resource needed in production increases, cost of production increases and this discourages production. Production would decrease and supply would decrease. This would shift the supply curve inward. When the supply curve shifts inward, equilibrium price rises and equilibrium quantity falls.

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