Suppose That an Economy Produces 2400 Units of Output, Employing

question 152

Multiple Choice

Suppose that an economy produces 2400 units of output, employing the 60 units of input, and the price of the input is $30 per unit. Refer to the information above. All else equal, if the price of each unit of input decreased from $30 to $20, then productivity would:

• A) Increase from $40 to $90 and aggregate supply would decrease
• B) Increase from $50 to $60 and aggregate supply would decrease
• C) Increase from $60 to $70 and aggregate supply would increase
• D) Remain unchanged but aggregate supply would increase

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Definitions:

Quasi-Contract

A legal concept that implies a contract exists to prevent unjust enrichment or unfair benefit, even though no formal contract exists between the parties.

Compensatory Damages

Financial compensation awarded to a plaintiff to cover losses directly related to an injury or damage.

Reliance Interest

Refers to the compensation aimed at putting a party in the position they would have been in had a contractual promise not been made.

Concurrent Condition

A situation in contract law where the obligations of parties are to be performed at the same time; the performance of one party is conditioned upon the performance by the other.