Explain How Each of the Following Events Would Affect the Short-Run

question 177

Essay

Explain how each of the following events would affect the short-run aggregate supply curve.
a.A decrease in the price level
b.A decrease in what the price level is expected to be in the future
c.A price level that is currently lower than expected
d.An unexpected decrease in the price of an important raw material
e.A decrease in the labor force

---

Definitions:

Linear Programming

A mathematical modeling technique used for optimization of a linear objective function, subject to linear equality and inequality constraints.

Sensitivity Analysis

A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.

Linear Programming

A mathematical method used for achieving the best outcome (such as maximum profit or lowest cost) in a mathematical model whose requirements are represented by linear relationships.

Corner Points

In linear programming, points at the corner or edge of the feasible region which may contain the optimal solution.