Consider the Economy's Aggregate Supply Curve

question 131

Multiple Choice

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

• A)there is a fall 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:

Total Variable Cost

The total of all costs that vary with output level in the short run.

Output

The total amount of goods or services produced by a company, industry, or economy within a specific period.

Total Cost

The aggregate cost of producing a given level of output, including both fixed and variable costs.

Output Level

The total quantity of goods or services produced by a firm or industry within a specific period.