Distinguish between a movement along the aggregate supply curve and a shift of the entire aggregate supply curve. What factors cause each to occur?
The aggregate supply curve is analogous to an individual firm's supply curve in microeconomic analysis. A change in the economy's price level will cause a movement along the aggregate supply curve. A change in one of the determinants of aggregate supply will cause a shift of the aggregate supply curve. Among the most important determinants are the level of money wages, other resource prices, and the level of technology and productivity.
You might also like to view...
Refer to the production possibilities frontier in the figure above. More of good X must be given up per unit of good Y gained when moving from point b to point a than when moving from point c to point b. This fact
A) illustrates decreasing opportunity cost. B) illustrates increasing opportunity cost. C) indicates that good X is more capital intensive than good Y. D) indicates that good Y is more capital intensive than good X.
Which of the following prices could represent Eli's willingness to pay for a baseball glove if he observed the market price of $43 and decided not to buy one?
A. $37 B. $45 C. $50 D. None of these could represent Eli's willingness to pay.
Monopsony means a labor market with a single buyer
a. True b. False Indicate whether the statement is true or false
Which of the following is the largest source of revenue for the federal government?
A. corporate income tax B. payroll tax C. personal income tax D. user charges