In this example problem, we analyze a diagram that illustrates the evolutionary relationships among different life forms. The diagram features two key points, labeled A and B, which represent significant evolutionary milestones. A is positioned at the beginning of the timeline, while B is located further along, indicating a more recent evolutionary point.

To determine the correct labels for A and B, we first consider the options provided. A is described as the most recent species to evolve on Earth, but since A is situated in the past on the diagram, this statement is inaccurate. The most recent species would be found towards the right side of the diagram, which represents the present. Therefore, we can conclude that A is not the most recent species but rather the common ancestor of all life forms.

Next, we examine the options for B. One option states that B is the common ancestor of bacteria and archaea, while another claims that B is the last common ancestor of archaea and eukarya. To identify the correct answer, we need to focus on the relationship depicted in the diagram. The closest evolutionary connection between archaea and eukarya is represented at point B, confirming that B is indeed the last common ancestor of these two domains.

Consequently, we can summarize that A represents the common ancestor of all life, while B signifies the last common ancestor of archaea and eukarya. This understanding of evolutionary relationships is crucial for grasping the broader concepts of phylogeny and the history of life on Earth.