If Crude Oil Is a Variable Factor of Production for a Firm

question 93

Multiple Choice

If crude oil is a variable factor of production for a firm, then an increase in the price of crude oil will lead to:

• A)a decrease in the quantity supplied by the firm, but no change in the firm's supply.
• B)a decrease in the firm's supply.
• C)an increase in the quantity supplied by the firm, but no change in the firm's supply.
• D)an increase in the firm's supply.

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Definitions:

Supply Prices

The costs associated with producing goods and services, which can influence the supply levels offered by producers.

Aggregate Supply Curve

A graphical representation showing the total quantity of goods and services that producers in an economy are willing and able to supply at different price levels.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible.

Real GDP

An inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, expressed in base-year prices.