Final answer:
The repeal of the minimum wage law in Xurbia could potentially lead to a rightward shift of the aggregate supply curve by lowering firms' costs but the actual impact depends on various economic factors.
Step-by-step explanation:
The repeal of the minimum wage law in the nation of Xurbia could potentially affect the aggregate supply (AS) curve by increasing the willingness of firms to supply more output at any given price level. Without a minimum wage, firms might be able to hire labor at lower costs, which could reduce their overall costs of production. This might shift the AS curve to the right, indicating an increase in the total output of the economy at the existing price levels.
However, the actual impact on the AS curve depends on other economic factors, such as the elasticity of labor supply, the bargaining power of workers, and the overall demand for goods and services. If the supply of labor is inelastic or workers have strong bargaining power, the repeal might not lead to lower wages. Alternatively, if the demand for goods and services is weak, the increase in aggregate supply might not result in higher levels of production.
In summary, the effect of repealing the minimum wage law on the AS curve in Xurbia is not straightforward and would depend on a complex interplay of economic variables.