The Slope of the Aggregate Supply Curve Increases as Output

question 131

Multiple Choice

The slope of the aggregate supply curve increases as output increases because

• A)the cost of resource use increases as potential is reached.
• B)consumers are willing to pay more as output expands.
• C)firms substitute capital for labor as prices increase.
• D)firms substitute capital for labor as capacity is reached.

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Definitions:

Effort

The amount of physical or mental energy expended to achieve a goal.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically improving on simple or well-practiced tasks.

Festinger

A psychologist known for his theory of cognitive dissonance, which suggests that people experience psychological discomfort when holding two or more contradictory beliefs.

Cognitive Dissonance

A psychological phenomenon where an individual experiences discomfort due to holding conflicting beliefs or attitudes, leading to an alteration in one of the beliefs or attitudes to reduce the discomfort.