Suppose that real domestic output in an economy is 2400 units, the quantity of inputs is 60, and the price of each input is $30. All else equal, if the price of each input decreased from $30 to $20, productivity would:
A. increase from $50 to $60 and aggregate supply would decrease.
B. increase from $60 to $70 and aggregate supply would increase.
C. increase from $40 to $90 and aggregate supply would decrease.
D. remain unchanged and aggregate supply would increase.
Answer: D
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If someone who was working full time is now only working part time, this change in status will cause the unemployment rate to
A) increase. B) decrease. C) remain unchanged. D) It depends on how many hours this person is now working each week.
Amanda, age 6, opens a lemonade stand. She makes all the lemonade from a mix she found in her parents' pantry. Her stand is an old box she found in the garage. The pitcher and paper cups were taken from the kitchen. Which of the following is true?
a. The opportunity cost of the lemonade is zero. b. The only opportunity cost of the lemonade is Amanda's time. c. Amanda's explicit costs are zero. d. The implicit costs of Amanda's lemonade are zero. e. Whatever revenue Amanda gets will be pure economic profit.