Which of the following events would increase the cost of production?

• A. A technological advancement that improves efficiency
• B. A decrease in wage rates for workers
• C. An increase in the price of raw materials
• D. A reduction in government taxes on production

Answer: (C)

Verified step by step guidance

1. Understand that the cost of production refers to the total expenses a firm incurs to produce goods or services, including inputs like labor, raw materials, and taxes.
2. Analyze how each event affects production costs: a technological advancement that improves efficiency typically lowers costs by producing more output with the same or fewer inputs.
3. Recognize that a decrease in wage rates for workers reduces labor costs, which lowers the overall cost of production.
4. Note that an increase in the price of raw materials raises the cost of inputs directly, thereby increasing the total cost of production.
5. Understand that a reduction in government taxes on production decreases the financial burden on producers, thus lowering production costs.