How Does Aggregate Demand Curve (AD) Differ from an Individual

question 294

Multiple Choice

How does aggregate demand curve (AD) differ from an individual demand curve (D) ?

• A) AD is generally vertical while D is usually downward sloping.
• B) D represents the price-quantity relationship for a single good or service while AD looks at the entire economic system.
• C) Look for D in macroeconomic analyses and for AD in microeconomics.
• D) AD is generally a downward sloping curve while D usually slopes upward.

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Definitions:

Implicit Costs

The opportunity costs of using resources that a firm already owns to produce goods or services instead of earning money from these resources elsewhere.

Accounting Costs

Expenses recognized in a company's financial statements or accounts, representing outlays related to its operations and maintenance.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Economic Profit

The surplus remaining after deducting both the explicit and implicit costs from total revenues, representing the financial gain that exceeds the total cost of resources used.