Figure 33-3 -Refer to Figure 33-3. the Shift of the Short-Run Aggregate-Supply

question 12

Multiple Choice

Figure 33-3
-Refer to Figure 33-3. The shift of the short-run aggregate-supply curve from SRAS₂ to SRAS₁

• A)could be caused by a decrease in the expected price level.
• B)could be caused by an outbreak of war in the Middle East.
• C)causes the economy to experience a decrease in the unemployment rate.
• D)causes the economy to experience a drop in the price level.

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Definitions:

Opportunity Cost

The best alternative that we forgo, or give up, when we make a choice or a decision.

ΔTVC/Δq

ΔTVC/Δq represents the change in Total Variable Cost (TVC) resulting from producing one additional unit of output, equivalent to Marginal Cost.

AVC

AVC, or Average Variable Cost, is the total variable costs divided by the quantity of output produced.

MC

Marginal Cost, the increase in total cost that arises from producing one additional unit of a product or service.