The Horizontal Short-Run Aggregate Supply Curve

question 201

Multiple Choice

The horizontal short-run aggregate supply curve

• A) assumes that wages and all other input prices are constant.
• B) shows that real GDP can be increased only when prices increase.
• C) assumes that there is full employment in the economy.
• D) assumes that opportunity cost is constant.

---

Definitions:

Quadratic

Pertaining to an equation, function, or model that involves the square of a variable, typically expressed in the form ax^2 + bx + c = 0 where a, b, and c are constants.

Long-run Cost Function

A mathematical representation that shows the lowest possible cost of producing different levels of output when all input factors can be varied.

Experience

The knowledge or skill acquired by a period of practical involvement in or exposure to events or activities.

Units Produced

The total quantity of products manufactured or produced by a company or an industry within a specific period.