Multiple Select Question

Question

Select all that apply

Which of the following would be effects on the price of machinery when the cost of machinery components increases?
Multiple select question.

The aggregate supply curve would shift to the right.

Machinery prices would be frozen at current levels.

The aggregate supply curve would shift to the left.

Per-unit production prices for machinery would rise.

Answer 1

The correct options are:

• The aggregate supply curve would shift to the left.
• Per-unit production prices for machinery would rise.

When the cost of machinery components increases, it generally leads to higher production costs for machinery, which can reduce the overall supply at existing prices, shifting the aggregate supply curve to the left. Additionally, the increase in component costs would raise per-unit production prices for machinery. The other options do not accurately reflect the economic principles involved.