Sticky Prices: Definition, Theory & Model

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

A sticky price is a price that:

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1. What is the shape of an aggregate supply curve in the long run?

2. What is the shape of the aggregate supply curve in the short run?

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About This Quiz & Worksheet

What is the sticky prices model? Use this interactive worksheet and quiz to help you understand the answer to that question, as well as the connection between changes in the economy and businesses with set costs.

Quiz & Worksheet Goals

This worksheet and quiz will assess your knowledge of the following:

  • Definition of sticky prices
  • Shape of an aggregate supply curve in the short run and long run
  • Menu costs
  • How changes in the economy affect businesses with menu costs

Skills Practiced

Use these skills when working with the worksheet and quiz:

  • Reading comprehension - ensure that you draw the most important information from the related sticky prices lesson
  • Making connections - use understanding of the concept of aggregate supply
  • Information recall - access the knowledge you've gained regarding menu costs and aggregate supply curves

Additional Learning

The corresponding lesson Sticky Prices: Definition, Theory & Model will prepare you to:

  • Identify a long-term and a short-term aggregate supply curve
  • Discuss the correlation between a changing economy and businesses with menu costs
  • Explain why the existence sticky prices might correlate to short-term aggregate supply curves sloping upwards
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