-Refer to Exhibit 17-4 Assume That the Starting Point in Graphs

question 91

Multiple Choice

-Refer to Exhibit 17-4 Assume that the starting point in graphs (a) and (b) in Exhibit 17-4 is point 1.After a decrease in income taxes,there would be a ______________________ which would cause a movement along the production function from point 1 to point ______________.The result would be a shift of the LRAS curve from LRAS₁ to _______________ resulting in _______________..

• A) leftward shift of the labor supply curve from S_L1 to S_L3; movement along the production function to point 3; LRAS₃; a shrinking economy
• B) rightward shift of the labor supply curve from S_L1 to S_L2; movement along the production function to point 3; LRAS₃; a shrinking economy
• C) leftward shift of the labor supply curve from S_L1 to S_L3; movement along the production function to point 2; LRAS₂; economic growth
• D) rightward shift of the labor supply curve from S_L1 to S_L2; movement along the production function to point 2; LRAS₂; economic growth

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, such as indirect materials, indirect labor, and other overhead costs.

Labor Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected, multiplied by the standard labor rate.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services.

Direct Labor-Hours

The sum of hours contributed by personnel directly employed in the process of manufacturing.