Any Improvement in Overall Production Technology That Permits More Output

question 310

Multiple Choice

Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes

• A) a movement up the supply curve resulting in both a higher equilibrium price and quantity.
• B) a rightward shift of the supply curve so that more is offered at each price.
• C) no movement of the supply curve, but a fall in price and a decrease in quantity supplied.
• D) a leftward shift of the supply curve so that less is offered for sale at each price.

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Definitions:

Fixed Manufacturing Overhead

Fixed manufacturing overhead costs are those production expenses that do not change with the volume of production, such as rent and salaries.

Absorption Costing

A bookkeeping system that integrates all costs, both direct and indirect, associated with the production of a product into its final cost.

Direct Labor

The wages and salaries paid to employees who are directly involved in the production of goods or the provision of services.

Manufacturing Overhead

Costs in the production process that are not directly tied to a specific product, such as factory utilities or salaries of supervisors.