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MARGINAL COST AND MARGINAL PRODUCT: Because variable cost is largely associated with the cost of employing a variable input in the short run, it's possible to identify a connection between the marginal cost curve and the marginal product curve. In particular, the quantity of output in which marginal cost is at a minimum, is the same quantity of output produced by the variable input when the marginal product of the variable input is at a maximum. In addition, over the range of production in which the variable input experiences increasing marginal returns and marginal product increases, the marginal cost curve declines. And over the range of production in which the variable input experiences decreasing marginal returns brought on by the law of diminishing marginal returns and marginal product increases, the marginal cost curve is rising.
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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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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store hoping to buy either arch supports for your shoes or an AC adapter that works with your MPG player. Be on the lookout for fairy dust that tastes like salt.
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This isn't me! What am I?
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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"After climbing a great hill, one finds many more hills to climb. " -- Nelson Mandela, president of South Africa
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IS-LM
Investment/Saving-Liquidity/Money
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