A Supply Shock Does Not Occur When

question 10

Multiple Choice

A supply shock does not occur when:

• A)a drought destroys crops.
• B)unions push wages up.
• C)the Bank of Canada increases the money supply.
• D)an oil cartel increases world oil prices.

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Definitions:

Short-Run Total Cost Function

A formula showing the total cost of production when at least one factor of production is fixed in the short run.

Average Cost

Calculated by dividing the total cost of production by the number of goods produced.

Quantity of Output

The total amount of goods or services produced by a company, industry, or country.

Production Function

A mathematical model describing the relationship between the inputs used in production and the output of goods or services produced.