A Favourable Supply Shock,such as a Fall in the Price

question 67

Multiple Choice

A favourable supply shock,such as a fall in the price of oil,would

• A)cause firms to demand less labour at any given real wage.
• B)cause the labour demand curve to shift to the left.
• C)increase the marginal product of labour.
• D)decrease the real wage.

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Definitions:

Net Operating Income

A measure of the profitability of a business's core operational activities, excluding any income or expenses not directly related to its main operations.

Sales Volumes

The quantity of products or services sold by a company within a specific period.

Contribution Margin Per Unit

The difference between the selling price per unit and variable cost per unit of a product.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed costs in total costs.