Why does the short-run aggregate supply curve slope upward?
What will be an ideal response?
The short-run aggregate supply curve slopes upward because as the prices of final goods and services rise, the prices of inputs rise more slowly. The higher price level increases profits and the willingness of firms to supply more goods and services. A secondary reason the SRAS slopes upward is that, as the price level rises, some firms are slow to adjust their prices. A firm that raises its prices slowly when the price level increases may find that its sales increase and therefore will increase production.
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Marginal utility is the:
A) sensitivity of consumer purchases of a good to changes in the price of that good. B) change in total utility obtained by consuming one more unit of a good. C) change in total utility obtained by consuming another unit of a good divided by the change in the price of that good. D) total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed.
The demand curve for high-skilled labor lies to the right of the demand curve for low-skilled labor because
A) there are more high-skilled workers than low-skilled workers. B) high-skilled workers require more compensation to convince them to work than do low-skilled workers. C) high-skilled labor is more productive than low-skilled labor. D) firms need not be concerned with the minimum wage in the market for high-skilled labor.