Consider the Economy's Aggregate Supply Curve

question 8

Multiple Choice

Consider the economy's aggregate supply curve.Other things being equal,firms' unit costs will tend to fall if

• A)there is a rise in the price of oil.
• B)the government increases payroll taxes.
• C)wages fall.
• D)wage and price controls are in effect.
• E)wage increases are less than productivity increases.

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Definitions:

Manufacturing Sunk Cost

Costs that have already been incurred in the manufacturing process and cannot be recovered or altered by future decisions.

Capital Investment Analysis

The process of evaluating the potential returns and risks associated with investing in long-term assets to aid in decision making.

Manufacturing Productivity

A measure of the efficiency of a manufacturing process, typically calculated by dividing output by input.

Present Value

The immediate value of an upcoming lump sum or series of financial inflows, quantified by a specific rate of return.