In the Short Run, Firms Increase Output

question 102

Multiple Choice

In the short run, firms increase output

• A)only by increasing the size of their plant.
• B)only by decreasing the size of their plant.
• C)only by increasing the amount of labor used.
• D)only by decreasing the amount of labor used.
• E)either by increasing the amount of labor used or by increasing the size of their plant.

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Definitions:

APS (Average Propensity to Save)

The fraction of total income that is saved by the average household.

Disposable Income

The amount of money an individual or household has to spend or save after income taxes have been deducted.

Saving

The act of setting aside money for future use rather than spending it immediately.

Disposable Income

The available financial amount for households to use in saving or spending after accounting for income tax.