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3 years ago

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Business

1 answer:

zhuklara [117]3 years ago

7 0

Answer:

The stick price theory helps to explain the upward sloping shape of the aggregate supply curve.

Explanation:

The price tends to be sticky for a number of reasons.

Firms will need to incur menu costs if they constantly change prices
Frequent change in prices may annoy the customers
The wage rates remain the same even after change in price because the wages are based on contracts

The short-run aggregate supply curve is upward sloping because of the stickiness of price, there is a positive and direct relationship between output and price. Due to the high expected price level in the short run, the firms will expect the input prices to rise along with an increase in the product price.

To counter the increase in inputs price, the product price is kept high. The higher price provides motivation to produce more. That's why the short-run aggregate supply curve is upward sloping.

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"When aggregate demand increases," A. the price level is likely to fall as GDP rises. B. aggregate supply will shift to the rig

stira [4]

Answer:

D. the price level is likely to rise as GDP rises.

Explanation:

The aggregate demand measures all the goods produced in an economy at a given price in a particular period.

When the aggregate demand increases, the aggregate demand curve shifts to the right. When aggregate demand increases, aggregate demand exceeds aggregate supply and aggregate price and output would increase.

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2 years ago

Substance use/abuse becomes a form of self-soothing when you feel stress or anxious

docker41 [41]

It is true that substance use can make you feel self-soothing when you feel stress or anxious. When you abuse these substances, it will make you feel dependent on them because of you wanting them every day. This is the reason why abusing substances can harm your body and make you feel uncomfortable without it.

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3 years ago

Assume the world market for oil is competitive and that the marginal cost of producing (extracting and bringing to market) ano

xz_007 [3.2K]

Answer:

The economic surplus will decrease by $2.20

Explanation:

$81.40 and $79.20 are marginal cost and benefit, which are the changes to total costs and total benefits due to producing and consuming one additional barrel of oil.

They can be used to calculate change to economic surplus, which is the change to the net economic value received by society, which is given by:

marginal benefit - marginal cost = $79.20 - $81.40 = - $2.20

7 0

3 years ago

The high entry barriers in a given industry

arlik [135]

Answer:

1. Economies of scale.

2. Capital requirements.

3. Product differentiation. 

6 0

3 years ago

Which of the following would be most likely to increase your opportunity cost of attending college? a recession in the economy t

kipiarov [429]

Answer:

To start a job today that would permit you to earn about 50 percent more than you expected to make after graduation.

Explanation:

Opportunity cost is the cost of best next option foregone for choosing the current option. Here, the best opportunity foregone is of earning and starting the job today which will allow to earn 50 % more than what can be earned after completing the graduation, as already for graduation fees will be paid, along with further expenses. In that case if dropping graduation and starting a job was this beneficial then it would have been better.

Therefore the following has increased the opportunity cost of pursuing graduation.

to start a job today that would permit you to earn about 50 percent more than you expected to make after graduation

4 0

3 years ago