A short-run aggregate supply curve (SRAS) assumes:
a. the CPI is fixed
b. each point on the SRAS is potential real GDP.
c. fixed or sticky nominal wages.
d. nominal wages vary directly with price changes.
c
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An entrepreneur knits sweaters for sale. The entrepreneur has fixed costs of $100. When he makes 10 sweaters in one month, he must spend $15 on wool. To make eleven sweaters in one month, he must spend $17 on wool. If he has no other costs, what is the marginal cost of the eleventh sweater?
a) $1 b) $2 c) $17 d) $117
Some baseball parks have a "7th Inning Stretch" where beer, hotdogs and other food items are offered for sale at a lower price
What economic concept is being used by the baseball park to justify this practice? If it is successful at selling more food and drink with this practice why don't they lower prices at the beginning of the game?