-In the Figure Above, the Economy Is at Point a When

question 140

Multiple Choice

-In the figure above, the economy is at point A when the price level falls to 100. Money wage rates and all other resource prices remain constant. Firms are willing to supply output equal to

• A)$13.0 billion.
• B)$12.5 billion.
• C)$13.5 billion.
• D)None of the above answers is correct.

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Definitions:

Sales Tax

A tax paid to a governing body for the sales of certain goods and services, usually added to the price of the goods or service.

Indifference Curve

An indifference curve is a graph that shows a combination of two goods that give a consumer equal satisfaction and utility.

Normal Good

A good for which demand increases when income increases and falls when income decreases, all other factors being equal.

Income Increased

A rise in the amount of money earned from work, investments, or other sources.