The Short-Run Aggregate Supply Curve

question 32

Multiple Choice

The short-run aggregate supply curve:

• A)represents a fixed volume of output.
• B)reflects how much real GDP suppliers are willing and able to produce at different price levels.
• C)shifts only when the long-run aggregate supply shifts.
• D)is not affected at all by the price level.
• E)reflects the amount of real GDP supplied when all input prices are variable.

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Break-even Point

The level of production or sales volume at which total revenues equal total costs, resulting in no net profit or loss.

Variable Expense

Costs that vary in relation to a company's operations.

Contribution Margin Ratio

A financial performance metric that measures the additional profit generated for each dollar of sales after variable costs are subtracted.