The Aggregate Supply Curve (Short Run)

question 222

Multiple Choice

The aggregate supply curve (short run)

• A) graphs as a horizontal line.
• B) is steeper above the full-employment output than below it.
• C) slopes downward and to the right.
• D) presumes that changes in wages and other resource prices match changes in the price level.

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Definitions:

Contribution Margin Ratio

The contribution margin ratio is a financial metric indicating the proportion of sales revenue that exceeds variable costs and is available to cover fixed costs and generate profit.

Fixed Costs

Outlays for rent, salaries, and insurance that are unaffected by variations in the volume of production or sales.

Sales Dollars

A term referring to the total revenue generated from the sale of goods or services, expressed in monetary value.

High-Low Method

A method employed in cost accounting that calculates estimated variable and fixed costs using the highest and lowest activity levels.