Question

At points on the short run aggregate supply curve (SAS) to the left of the long run aggregate supply curve (LAS), resources are most likely:________.a. overutilized, making it more likely that the short run aggregate supply curve (SAS) will shift up.b. underutilized, making it more likely that the short run aggregate supply curve (SAS) will shift down.c. overutilized, making it more likely that the short run aggregate supply curve (SAS) will shift down.d. underutilized, making it more likely that the short run aggregate supply curve (SAS) will shift up.

Answer 1

Answer:.b----underutilized, making it more likely that the short run aggregate supply curve (SAS) will shift down.

Explanation: At  points on the short run aggregate supply curve shifting to the left of the long run aggregate supply curve means that the economy is at the stage where output in the short run will not exceed output on the long run therefore resources will be underutilized resulting to lower prices   and therefore causing a  a downward shift on the short run aggregate supply curve.

Answer 2

Answer:

d. underutilized, making it more likely that the short run aggregate supply curve (SAS) will shift up.

Explanation:

Aggregate supply is a sum of all goods and services that is supplied to a consumer. In the short run aggregate supply is affected by factors such as price level, government policy.

When the prices of inputs increases it results in a reduction in amount aggregate supplied (shift to the left and upward as illustrated in the diagram).

This implies that resources are not used maximally to produce output, but production is limited by the higher cost of inputs.

In the attached diagram aggregate supply shifts upward and to the left from AS1 to AS2