Question 1

Figure 5-15 
-Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between point B and point C?
A) 1.44
B) 1.29
C) 0.96
D) 0.78

Accepted Answer

The answer of Figure 5-15 
-Refer to Figure 5-15.Using the...

Question 2

Figure 5-13 
-Refer to Figure 5-13.Along which of these segments of the supply curve is supply least elastic?
A) between G and H
B) between C and D
C) between A and C
D) between A and B

Accepted Answer

The supply curve is least elastic between G and H because the slope of the curve is steepest in this segment. This means that a small change in price will lead to a large change in quantity supplied.

Question 3

Figure 5-15 
-Refer to Figure 5-15.If,holding the supply curve fixed,there were an increase in demand that caused the equilibrium price to increase from $6 to $8,then sellers' total revenue would
A) increase.
B) decrease.
C) remain unchanged.
D) The effect on total revenue cannot be determined from the given information.

Accepted Answer

An increase in equilibrium price from $6 to $8 implies that the new price is higher than the previous equilibrium price, indicating that the quantity demanded increased more than the quantity supplied. Thus, sellers will increase their revenue as they can sell their products at a higher price, resulting in a larger total revenue. Therefore, an increase in demand causes an increase in sellers' total revenue.

Question 4

Figure 5-15 
-Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between point A and point B?
A) 0.58
B) 0.71
C) 1.06
D) 1.4

Accepted Answer

The answer of Figure 5-15 
-Refer to Figure 5-15.Using the...

Question 5

Figure 5-13 
-Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points D and G?
A) 1.89
B) 1.26
C) 0.53
D) 0.34

Accepted Answer

The answer of Figure 5-13 
-Refer to Figure 5-13.Using the...

Question 6

Table 5-6
 
-Refer to Table 5-6.Along which of the supply curves does quantity supplied move proportionately more than the price?
A) along supply curve B only
B) along supply curves B and C
C) along all three supply curves
D) Quantity supplied moves proportionately more than the price along none of the three supply curves.

Accepted Answer

Quantity supplied moves proportionately more than the price when the supply curve is elastic. The question implies that none of the supply curves in Table 5-6 are elastic, hence the correct answer is that quantity supplied does not move proportionately more than the price along any of the supply curves.

Question 7

Figure 5-13 
-Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points A and B?
A) 2.33
B) 1.0
C) 0.43
D) 0.1

Accepted Answer

The midpoint method for calculating elasticity is:%ΔQ/%ΔP = (Q2 - Q1)/(P2 - P1) * (P1 + P2)/(Q1 + Q2)Plugging in the values from points A and B, we get:%ΔQ/%ΔP = (100 - 50)/(10 - 5) * (5 + 10)/(50 + 100) = 2.33

Question 8

Figure 5-12
The following figure shows the supply curve for a particular good. 
-Refer to Figure 5-12.Using the midpoint method,what is the price elasticity of supply between $16 and $40?
A) 0.125
B) 0.86
C) 1.0
D) 2.5

Accepted Answer

The answer of Figure 5-12
The following figure shows the supply...

Question 9

At a price of $1.20,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.40,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is
A) 0.15
B) 0.375
C) 2.5
D) 2.60

Accepted Answer

The answer of At a price of $1.20,a local coffee...

Question 10

Figure 5-13 
-Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points B and C?
A) 1.67
B) 1.19
C) 0.84
D) 0.61

Accepted Answer

Using the midpoint method, the price elasticity of supply between points B and C can be calculated as:
Eps = ((Q2-Q1)/((Q1+Q2)/2)) / ((P2-P1)/((P1+P2)/2))
Eps = ((1600-1400)/((1400+1600)/2)) / ((5-6)/((5+6)/2))
Eps = ((200/1500)) / ((-1/5.5))
Eps = 1.33 / -0.18
Eps = -7.39
Since elasticity cannot be negative, we take the absolute value:
Eps = 7.39
Therefore, the price elasticity of supply between points B and C is approximately 1.19 (rounded to the nearest hundredth).

Question 11

At a price of $1.00,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.20,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is
A) 0.45
B) 0.90
C) 1.11
D) 2.20

Accepted Answer

The answer of At a price of $1.00,a local coffee...

Question 12

Table 5-6
 
-Refer to Table 5-6.Which of the three supply curves represents the least elastic supply?
A) supply curve A
B) supply curve B
C) supply curve C
D) There is no difference in the elasticity of the three supply curves.

Accepted Answer

Supply curve A represents the least elastic supply because it has a steeper slope, indicating that a change in price will result in a relatively small change in the quantity supplied. In contrast, supply curves B and C have flatter slopes, indicating that a change in price will result in a larger change in the quantity supplied, making them more elastic.

Question 13

Figure 5-12
The following figure shows the supply curve for a particular good. 
-Refer to Figure 5-12.Using the midpoint method,what is the price elasticity of supply between $100 and $220?
A) 0.58
B) 0.67
C) 1.00
D) 1.73

Accepted Answer

The midpoint method for calculating elasticity is:Es = (%ΔQ / %ΔP) * (Q1 + Q2) / (P1 + P2)where:Es = elasticity of supply%ΔQ = percentage change in quantity supplied%ΔP = percentage change in priceQ1 = initial quantity suppliedQ2 = final quantity suppliedP1 = initial priceP2 = final priceUsing the midpoint method, the price elasticity of supply between $100 and $220 is:Es = ((200 - 100) / (220 - 100)) * (100 + 200) / (100 + 220) = 0.58

Question 14

Figure 5-14 
-Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $6 and $8?
A) 0.86
B) 1.00
C) 1.17
D) 1.25

Accepted Answer

Using the midpoint formula: 
Price elasticity of supply = ((change in quantity supplied / midpoint quantity) / (change in price / midpoint price))
Midpoint quantity = (10 + 14) / 2 = 12
Midpoint price = ($6 + $8) / 2 = $7
Change in quantity supplied = (14 - 10) = 4
Change in price = ($8 - $6) = $2
Therefore, price elasticity of supply = ((4 / 12) / (2 / 7)) = 1.17, which is closest to choice C.

Question 15

On a certain supply curve,one point is (quantity supplied = 200,price = $2.00)and another point is (quantity supplied = 250,price = $2.50).Using the midpoint method,the price elasticity of supply is about
A) 0.2.
B) 0.5.
C) 1.0.
D) 2.5.

Accepted Answer

The answer of On a certain supply curve,one point is...

Question 16

Table 5-6
 
-Refer to Table 5-6.Which of the three supply curves represents the most elastic supply?
A) supply curve A
B) supply curve B
C) supply curve C
D) There is no difference in the elasticity of the three supply curves.

Accepted Answer

The answer of Table 5-6
 
-Refer to Table 5-6.Which of...

Question 17

On a certain supply curve,one point is (quantity supplied = 200,price = $4.00)and another point is (quantity supplied = 250,price = $4.50).Using the midpoint method,the price elasticity of supply is about
A) 0.22.
B) 0.53.
C) 1.00.
D) 1.89.

Accepted Answer

The answer of On a certain supply curve,one point is...

Question 18

Figure 5-13 
-Refer to Figure 5-13.Along which of these segments of the supply curve is supply most elastic?
A) between A and B
B) between C and D
C) between D and H
D) between G and H

Accepted Answer

The segment between A and B is steeper, meaning that relatively small changes in price will result in larger changes in quantity supplied. This indicates a more elastic supply curve.

Question 19

Figure 5-14 
-Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $4 and $6?
A) 0.75
B) 1.00
C) 1.20
D) 1.25

Accepted Answer

The answer of Figure 5-14 
-Refer to Figure 5-14.Using the...

Question 20

Holding all other factors constant and using the midpoint method,if a pencil manufacturer increases production by 20 percent when the market price of pencils increases from $0.50 to $0.60,then supply is
A) inelastic,since the price elasticity of supply is equal to .91.
B) inelastic,since the price elasticity of supply is equal to 1.1.
C) elastic,since the price elasticity of supply is equal to 0.91.
D) elastic,since the price elasticity of supply is equal to 1.1.

Accepted Answer

The price elasticity of supply is calculated using the midpoint method as (percentage change in quantity supplied) / (percentage change in price). Here, the percentage change in price is (0.60 - 0.50) / ((0.60 + 0.50) / 2) = 0.18, and the percentage change in quantity supplied is 0.20. Thus, the elasticity is 0.20 / 0.18 = 1.1, which is greater than 1, indicating that supply is elastic.

Quiz 5: Elasticity and Its Application

Figure 5-15 -Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between point B and point C?

Figure 5-13 -Refer to Figure 5-13.Along which of these segments of the supply curve is supply least elastic?

Figure 5-15 -Refer to Figure 5-15.If,holding the supply curve fixed,there were an increase in demand that caused the equilibrium price to increase from $6 to $8,then sellers' total revenue would

Figure 5-15 -Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between point A and point B?

Figure 5-13 -Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points D and G?

Table 5-6 -Refer to Table 5-6.Along which of the supply curves does quantity supplied move proportionately more than the price?

Figure 5-13 -Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points A and B?

Figure 5-12 The following figure shows the supply curve for a particular good. -Refer to Figure 5-12.Using the midpoint method,what is the price elasticity of supply between $16 and $40?

At a price of $1.20,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.40,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is

Figure 5-13 -Refer to Figure 5-13.Using the midpoint method,what is the price elasticity of supply between points B and C?

At a price of $1.00,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.20,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is

Table 5-6 -Refer to Table 5-6.Which of the three supply curves represents the least elastic supply?

Figure 5-12 The following figure shows the supply curve for a particular good. -Refer to Figure 5-12.Using the midpoint method,what is the price elasticity of supply between $100 and $220?

Figure 5-14 -Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $6 and $8?

On a certain supply curve,one point is (quantity supplied = 200,price = $2.00) and another point is (quantity supplied = 250,price = $2.50) .Using the midpoint method,the price elasticity of supply is about

Table 5-6 -Refer to Table 5-6.Which of the three supply curves represents the most elastic supply?

On a certain supply curve,one point is (quantity supplied = 200,price = $4.00) and another point is (quantity supplied = 250,price = $4.50) .Using the midpoint method,the price elasticity of supply is about

Figure 5-13 -Refer to Figure 5-13.Along which of these segments of the supply curve is supply most elastic?

Figure 5-14 -Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $4 and $6?

Holding all other factors constant and using the midpoint method,if a pencil manufacturer increases production by 20 percent when the market price of pencils increases from $0.50 to $0.60,then supply is