Which of the following statements most likely lies within the realm of microeconomics? a. An increase in labor costs will increase the additional cost of producing another airplane. b. A rapid acceleration of the supply of money may create inflation. c. Unemployment rises during a recession and falls during an expansion. d. An increase in government spending will increase the aggregate demand for goods and services in the economy.

Question

Ruby Roberson

Social Studies

1 August, 10:25

Which of the following statements most likely lies within the realm of microeconomics? a. An increase in labor costs will increase the additional cost of producing another airplane. b. A rapid acceleration of the supply of money may create inflation. c. Unemployment rises during a recession and falls during an expansion. d. An increase in government spending will increase the aggregate demand for goods and services in the economy.

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Answers (1)

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Shannon Henry · Answer 1

a. An increase in labor costs will increase the additional cost of producing another airplane.

Explanation:

Microeconomics is concerned with the individual markets in the economy. It is the study of small and individuals firms and businesses allocated resources. It takes into consideration of the actions taken by individual units.

Thus if the labor cost or wages of labor is increased, then according to the concept of microeconomics, it will increased the cost of the production of another airplane.

Thus the correct option is (a).