If the Money Wage and Other Resource Prices Do Not

question 231

Multiple Choice

If the money wage and other resource prices do not change when the price level rises by 10 percent,
)

• A) there is movement along the short- run aggregate supply curve
• B) the long- run aggregate supply curve shifts leftward
• C) massive labor lay- offs occur
• D) the short- run aggregate supply curve shifts leftward

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Definitions:

Consumption

The use of goods and services by households, or the action of using up a resource.

Income

The amount of money or goods that an individual or entity receives in exchange for providing a good or service, or through investing capital.

Utility Functions

Representations that quantify the satisfaction or happiness consumers gain from consuming various bundles of goods and services.

Fair Allocations

In economics and game theory, it refers to the distribution of resources or goods among participants in such a way that the allocation is considered equitable according to certain criteria.