When the Aggregate Supply Curve Is ________ the Price of Factors

question 51

Multiple Choice

When the aggregate supply curve is ________ the price of factors of production is fixed, with little or no upward pressure on price.

• A) horizontal
• B) vertical
• C) upward sloping
• D) downward sloping

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Definitions:

Pareto Efficient

A state of allocation of resources from which it is impossible to reallocate so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.

Net Benefit

The total positive impact of a decision or action, subtracting any costs or negative effects associated with it.

Trade

The exchange of goods, services, or both between parties, which can occur domestically or internationally.

Perfectly Competitive Market

A market structure characterized by many sellers and buyers, homogeneous products, and the free entry and exit of firms, leading to efficient outcome prices.