
TOTAL COST AND MARGINAL COST: A mathematical connection between marginal cost and total cost stating that marginal cost IS the slope of the total cost curve. If the total cost curve has a positive slope (that is, is upward sloping), then marginal cost is positive. Moreover, if the total cost curve has a positive and increasingly steeper slope, then the marginal cost is positive and rising. If the total cost curve has a positive and decreasingly steeper slope, then the marginal cost is positive but falling.
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Lesson 16: Aggregate Shocks  Unit 3: Basic Shifts

Page: 8 of 21

Topic:
AD Increase: Long Run



The longrun equilibrium is given by the intersection of the negativelysloped AD curve and the vertical LRAS. An increase in AD results in a new longrun equilibrium.
 At the new equilibrium, real production does not change, it stays at Qf. The price level increases from Po to P1.
 We're missing a lot of shortrun action that occurs as we go from one longrun equilibrium to another.






AUTONOMOUS CONSUMPTION Household consumption expenditures that do not depend on income or production (especially disposable income, national income, or even gross domestic product). That is, changes in income do not generate changes in consumption. Autonomous consumption is best thought of as a baseline or minimum level of consumption that the household sector undertakes in the unlikely event that income falls to zero. It is measured by the intercept term of the consumption function or the consumption line. The alternative to autonomous consumption is induced consumption, which does depend on income.
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BEIGE MUNDORTLE [What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store wanting to buy either a genuine downfilled snow parka or throw pillows for your living room sofa. Be on the lookout for small children selling products doortodoor. Your Complete Scope
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The 1909 Lincoln penny was the first U.S. coin with the likeness of a U.S. President.


"Success is more a function of consistent common sense than it is of genius. "  An Wang, industrialist


CPI Consumer Price Index


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