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SHORT-RUN PRODUCTION ALTERNATIVES: A firm faces three production options in the short run based on a comparison between price, average total cost, and average variable cost. If price is greater than average total cost, a firm earns an economic profit by producing the quantity that equates marginal revenue with marginal cost. If price is less than average total cost but greater than average variable cost, a firm incurs an economic loss, but produces the quantity that equates marginal revenue with marginal cost. If price is less than average variable cost, a firm shuts down production in the short run, incurring an economic loss equal to total fixed cost.
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AGGREGATE SUPPLY SHIFTS Changes in the aggregate supply determinants shift both the short-run aggregate supply curve and the long-run aggregate supply curve. The mechanism is comparable to that for market supply determinants and market supply. There are two options--an increase in aggregate supply and a decrease in aggregate supply. An increase in resource quantity or quality or a decrease in resource price shifts one or both of the aggregate supply curves to right. A decrease in resource quantity or quality or an increase in resource price shifts one or both of the aggregate supply curves to left.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center trying to buy either a large, stuffed kitty cat or a cross-cut paper shredder. Be on the lookout for small children selling products door-to-door.
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It's estimated that the U.S. economy has about $20 million of counterfeit currency in circulation, less than 0.001 perecent of the total legal currency.
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"The greatest use of life is to spend it for something that will outlast it." -- William James, psychologist
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