Moving Along the Aggregate Supply Curve, When the Price Level

question 167

Multiple Choice

Moving along the aggregate supply curve, when the price level rises, the

• A)quantity supplied does not change because the aggregate supply curve is a vertical line.
• B)the quantity supplied increases.
• C)the quantity supplied decreases.
• D)the aggregate demand curve shifts rightward.
• E)the aggregate demand curve shifts leftward.

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production in a business.

Linear Equation

An algebraic equation in which each term is either a constant or the product of a constant and a single variable.

Variable Cost Per Unit

Variable Cost Per Unit is the cost that varies directly with the production volume, including materials and labor directly involved in the production.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or sales activity.