The Slope of the Immediate-Short-Run Aggregate Supply Curve Is Based

question 137

Multiple Choice

The slope of the immediate-short-run aggregate supply curve is based on the assumption that:

• A) Both input and output prices are fixed
• B) Neither input nor output prices are fixed
• C) Input prices are flexible but output prices are fixed
• D) Input prices are fixed but output prices are flexible

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Definitions:

Opportunity Cost

In economics, it refers to the benefit lost when choosing one alternative over another.

Mutual Fund

An investment vehicle comprising a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, or other assets.

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business, such as wages, rent, and materials.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns, without having to pay rent or purchase them.