FIGURE 23-3 Refer to Figure 23-3

question 11

Multiple Choice

FIGURE 23-3 Refer to Figure 23-3.Which of the following statements best describes the supply side of Economy B?

• A)Unit costs are rising rapidly,but firms can produce more output by employing standby capacity and overtime labour,for example,with no increase in the price level.
• B)Firms are producing well below their capacity and are willing to produce more only if prices rise.
• C)Unit costs are rising rapidly as firms are producing beyond their capacity.Firms will produce more only if prices increase.
• D)Firms are producing well below their capacity and are willing to produce more output with no increase in price.
• E)Firms are not able to produce more output because there is no excess capacity in the economy.

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Definitions:

Gain

A financial increase in the value of an asset or a rise in the value of an investment, excluding the amounts invested or cost incurred to achieve the gain.

Book Value

The net value of an asset or company based on its balance sheet accounts, calculated as assets minus liabilities.

Accumulated Depletion

The total amount charged against the natural resources (like timber, minerals, and oil) a company has extracted, reflecting the decrease in value of those resources.

Balance Sheet

A financial statement that displays the assets, liabilities, and owner's equity of an entity at a specific point in time, outlining its financial position.