The Aggregate Supply Curve

question 182

Multiple Choice

The aggregate supply curve

• A) shows what each producer is willing and able to produce at each income level.
• B) relates planned aggregate production to price level.
• C) is the sum of all supply curves of natural resources.
• D) shows a negative relationship between the price level and real Gross Domestic Product (GDP).

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Definitions:

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service, considering both the costs borne by the producer and any costs or benefits to third parties (externalities).

Public Good

A product or assistance made available to all societal members without financial gain, provided by either state bodies or voluntary private groups or individuals.

Nonrival

A characteristic of a good whereby one person's consumption does not reduce its availability to others.

Nonexcludable

A characteristic of a good or service that prevents the owner or provider from excluding individuals from using it once it has been provided.