According to economic theory, how are wages and resource costs described in the long run?

In economic theory, wages and resource costs in the long run are described as flexible. This flexibility allows them to adjust to changes in supply and demand conditions, as well as shifts in the overall economy. When the economy experiences growth, wages can rise as firms compete for labor, and resource costs may change due to variations in availability and technology advancements.

This idea contrasts with the concept of rigidity, where wages and resource costs would remain fixed despite changes in market conditions, potentially leading to unemployment or inefficiencies. In a flexible system, the responsiveness of wages and resource costs helps stabilize the economy, as they can increase during expansions and decrease during recessions, allowing for adjustments in aggregate supply.

Long-term flexibility contributes to the self-correcting nature of the economy. As firms adjust their costs in response to economic signals, this mechanism plays a vital role in maintaining equilibrium in the labor market and the broader economy.

While some may think of wages as being rigid or constant over time, this does not accurately reflect the dynamic nature of economic conditions affecting labor and resource markets in the long run.