During the months of January and February, Axe Corporation purchased goods from three suppliers. The sequence of events was as follows: January 6 Purchased goods for $1,200 from Green with terms 2/10, n/30. January 6 Purchased goods from Munoz for $900 with terms 2/10, n/30. January 14 Paid Green in full. February 2 Paid Munoz in full. February 28 Purchased goods for $350 from Reynolds with terms n/45. Required: Assume that Axe uses a perpetual inventory system, the company had no inventory on hand at the beginning of January, and no sales were made during January and February. Calculate the cost of inventory as of February 28.

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.