FIGURE 23-3 -Refer to Figure 23-3.Which of the Following Statements Best Describes

question 103

Multiple Choice

FIGURE 23-3
-Refer to Figure 23-3.Which of the following statements best describes the supply side of Economy A in its current equilibrium position?

• A)Unit costs are rising,but firms can produce more output by employing standby capacity and overtime labour,for example,with no increase in the price level.
• B)Firms are producing well below their capacity and are willing to produce more only if prices rise.
• C)Unit costs are rising rapidly as firms are producing beyond their capacity.Firms will produce more only if prices increase.
• D)Firms are producing well below their capacity and are willing to produce more output with no increase in price.
• E)Unit costs are rising,but firms are able to produce more output because there is excess capacity in the economy.

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Definitions:

Office Space

Physical locations or areas where business activities are conducted, including rooms or suites for staff to work.

Unearned Service Revenue

Income received by a company for services not yet performed or delivered.

Revenue Recognition

The accounting principle that revenue should be reported in the financial statements in the period it is earned, not necessarily when the cash is received.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position by detailing assets, liabilities, and equity at a specific point in time.