The Shape of the Short-Run Aggregate Supply (SAS)curve Reflects Two

question 5

Essay

The shape of the short-run aggregate supply (SAS)curve reflects two different types of microeconomic markets (auction markets and the posted price markets).How is the price level linked to the level of output in each market? List five factors that might cause an upward shift of the SAS curve.

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Definitions:

Service Business

A type of business that provides intangible products or services to consumers, as opposed to selling physical goods.

Overhead

General, ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and insurance.

Direct Labor

Labor costs that are directly attributed to the production of goods, including wages for workers who manufacture a product or perform a service.

Gross Profit

The difference between sales and the cost of goods sold, representing the profit from trading activities before deduction of overheads and other selling expenses.