Question

A change in price of a good or service typically causes ________________ for that specific good or service.

a.a decreased demand

b.a change along the supply curve

c.no change

d.the supply curve to shift

Why would labor be treated as a variable cost?

a.they are costs incurred in the act of producing that will decrease with quantity produced

b.labor costs are an input cost that firms are unable to change in the short run

c.they are made before production starts and vary according to the specific line of business

d.producing larger quantities of a good or service generally requires more workers

Answer 1

1)

Answer: ( B)

When there is change in price of good or service, the movement takes place along the curve. There will be shift curve only if there is change in factors other than price of good or service.

2)

Answer: ( D)

variable cost changes with change in output level. Demand for labor changes when there is rise in output level.