The Following Table Gives Information About the Relationship Between Input

question 62

Multiple Choice

The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy: Suppose that the price of each input increased from $5 to $8.The per unit cost of production in the above economy would:

• A)rise by $1.50 and the aggregate supply curve would shift to the right.
• B)rise by 60 percent and the aggregate supply curve would shift to the left.
• C)rise by 60 percent and the aggregate demand curve would shift to the left.
• D)fall by $1.50 and the aggregate demand curve would shift to the right.

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Definitions:

Increased Demand

A situation where the desire or need for a product or service exceeds the existing supply at the current price.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Transactions where goods or services are provided to a customer with an agreement to pay at a later date.

Cash Sales

Transactions in which goods or services are paid for with cash at the time of the sale.