Which of the Following Would Shift the Production Function Upward

question 121

Multiple Choice

Which of the following would shift the production function upward?

• A) an increase in the price of oil
• B) an increase in the availability of a natural resource
• C) a decrease in the supply of labor
• D) an increase in the nominal wage rate

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Definitions:

Differential Income

The increase or decrease in income resulting from a change in business decisions or operations.

Variable Manufacturing Costs

Expenses that change in proportion to the production volume, such as raw materials and direct labor costs.

Differential Effect

The impact of a business decision on the revenue or cost, highlighting the difference between two alternatives.

Useful Life

The estimated period of time during which an asset is expected to be usable for the purpose for which it was acquired.