Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit.
Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:
A. Increase from $40 to $90 and aggregate supply would decrease
B. Increase from $50 to $60 and aggregate supply would decrease
C. Increase from $60 to $70 and aggregate supply would increase
D. Remain unchanged but aggregate supply would increase
D. Remain unchanged but aggregate supply would increase
You might also like to view...
If Tom's total utility from watching one more minute of television increases but the increase for each additional minute is smaller than the previous minute, he has diminishing marginal utility
Indicate whether the statement is true or false
In the Keynesian model, if aggregate expenditures exceed aggregate output and inventories of firms fall, then the aggregate output and the business sector could be expected to:
a. increase output. b. decrease output. c. decrease investment. d. hire fewer workers.
In the production of goods and services, trade—offs exist because
A) not all production is efficient. B) society has only a limited amount of productive resources. C) buyers and sellers often must negotiate prices. D) human wants and needs are limited at a particular point in time.
If the economy is in a recession and prices are relatively stable, then the discretionary fiscal policy or policies that would most likely be recommended to correct this macroeconomic problem would be:
a. Increased government spending or decreased taxation, or a combination of the two actions b. Decreased government spending or decreased taxation, or a combination of the two actions c. Increased government spending or increased taxation, but not a combination of the two actions d. Increased government spending or increased taxation, or a combination of the two actions