If the Money Wage and Other Resource Prices Do Not

question 203

Multiple Choice

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

• A) the short-run aggregate supply curve shifts leftward
• B) there is movement along the short-run aggregate supply curve
• C) the long-run aggregate supply curve shifts leftward
• D) the long-run aggregate supply curve shifts rightward

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Definitions:

Excess Profit

Profit earned by a firm that exceeds the normal level of profit in its industry, often due to monopolistic power or a lack of competition.

Economic Profit

The difference between the total revenue earned from production and the total costs (including both explicit and implicit costs) involved in the creation of that production.

Excess Profit

Profit earned by a firm that exceeds the normal profit level, often due to monopolistic power or market inefficiencies.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.