Question : Most supply curves _______ due to rising marginal costs.
Option 1: Possess a positive slope
Option 2: Have a downward slope
Option 3: Horizontal
Option 4: Vertical
Correct Answer: Possess a positive slope
Solution : Because of rising marginal costs, supply curves have a positive slope (MC). All else being equal, the quantity supplied of an item increases as the price increases, and vice versa, according to the law of supply. This means that the supply curve has a positive slope, i.e. it slopes up and to the right. Hence option a is correct.
Question : In the long run, the aggregate supply curve is:
Option 1: Vertical
Option 2: Horizontal
Option 3: Upward-sloping
Option 4: Downward-sloping
Question : In the short run, the aggregate supply curve is:
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