For This Question,assume That the Aggregate Production Function Is Represented

question 12

Multiple Choice

For this question,assume that the aggregate production function is represented by Y = AN.Which of the following represents the price setting relation for this economy?

• A)(1 + m)A
• B)(1 + m)A / W
• C)(1 + m)W
• D)W / A
• E) none of the above

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Definitions:

Average Product

The output, on average, produced by each unit of a variable input, like labor.

Marginal Cost

The additional cost incurred by producing one more unit of a good or service, which can influence production and pricing decisions.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, which decreases as production increases.

Total Cost

The sum of fixed costs and variable costs incurred by a business in the production of a good or service.