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SLOPE, SHORT-RUN AGGREGATE SUPPLY CURVE: The short-run aggregate supply (SRAS) curve has a positive slope, reflecting the direct relation between the price level and aggregate real production. A higher price level is related to more real production and a lower price level is related to less real production. The general reason is similar to that of market supply curves--the opportunity cost of production--three specific reasons can be identified: (1) inflexible resource prices that often makes it easier to reduce aggregate real production and resource employment when the price level falls; (2) the pool of natural unemployment, consisting of frictional and structural unemployment, that can be used temporarily to increase aggregate real production when the price level rises; and (3) imbalances in the purchasing power of resource prices that can temporarily entice resource owners to produce more or less aggregate real production than the would at full employment.
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TOTAL PRODUCT CURVE A curve that graphically represents the relation between total production by a firm in the short run and the quantity of a variable input added to a fixed input. When constructing this curve, it is assumed that total product changes from changes in the quantity of a variable input (like labor), while other inputs (like capital) are fixed. This is one of three key product curves used in the analysis of short-run production. The other two are marginal product curve and average product curve.
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A half gallon milk jug holds about $50 in pennies.
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"Nothing will ever be attempted if all possible objections must first be overcome. " -- Samuel Johnson, essayist, critic, lexicographer
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GARP
Generalized Axioms of Revealed Preference
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