Suppose That an Economy Produces 2,400 Units of Output, Employing

question 312

Multiple Choice

Suppose that an economy produces 2,400 units of output, employing 60 units of input, and the price of the input is $30 per unit. If productivity increased such that 3,000 units are now produced
With the quantity of inputs still equal to 60, then per-unit production costs would

• A) decrease and aggregate supply would decrease.
• B) decrease and aggregate supply would increase.
• C) increase and aggregate supply would decrease.
• D) remain unchanged and aggregate supply would remain unchanged.

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Definitions:

Net Sales

The revenue from sales after deducting returned goods, allowances for damaged or missing goods, and any discounts allowed.

Cost Of Goods Sold

The expenditures directly associated with manufacturing goods that a company sells, consisting of materials and labor.

Departmental Gross Profit

The gross profit of a specific department within a business, calculated by subtracting the cost of goods sold from the sales revenue of that department.

Photography Department

A specialized division within a company or institution focused on photographic services, including taking, editing, and selling photographs.