Question 1

There are some special types of goods for which supply cannot change irrespective of the length of time allowed for change, such as Beethoven symphonies.The price elasticity of supply for these goods is _____.

Accepted Answer

The price elasticity of supply for goods which cannot have their supply changed is zero. This means that a change in price will not affect the quantity supplied at all. Therefore, the answer is D, zero.

Question 2

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the income elasticity of demand for noodles is _____.

Accepted Answer

The answer of Scenario 19.1 The demand for noodles is...

Question 3

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Accepted Answer

Price elasticity of supply (PES) = percentage change in quantity supplied / percentage change in price
Here, percentage change in price = 20%
Percentage change in quantity supplied = 10%
Therefore, PES = 10% / 20% = 0.5

Question 4

Supply curves applicable to shorter periods of time tend to:

Accepted Answer

The answer of Supply curves applicable to shorter periods of...

Question 5

Suppose the price of a product is reduced from $10 to $6 and the quantity demanded increases from 40 to 60 units.From this we can conclude that the price elasticity of demand over this price range is equal to _____.

Accepted Answer

% change in price = ((10-6)/10)*100 = 40%
% change in quantity demanded = ((60-40)/50)*100 = 40%
Price Elasticity of Demand = % change in quantity demanded / % change in price 
= 40% / 40% 
= 1 
Therefore, the price elasticity of demand over this price range is equal to 1, which is closest to option B, 1.25.

Question 6

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

Accepted Answer

In the context of the statement, the short run refers to the period after deregulation when prices may temporarily increase due to market adjustments, whereas the long run refers to a period when prices are expected to fall as new market entrants begin producing electricity and all necessary adjustments are made. Option C includes all of these necessary conditions for the long run. Options A, B, D, and E either do not include all necessary conditions or provide inaccurate time frames.

Question 7

When economists speak of the short run, they are referring to _____.

Accepted Answer

In economics, the short run refers to a period of time short enough that at least one of the resources (inputs) cannot be varied. This is because in the short run, some factors of production are fixed and cannot be adjusted due to contracts, physical limitations, or other constraints.

Question 8

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the quantity of noodles demanded at a price of $8 is _____.

Accepted Answer

The answer of Scenario 19.1 The demand for noodles is...

Question 9

If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?

Accepted Answer

The answer of If 12 candy bars are demanded at...

Question 10

When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _____ the quantity supplied of the product by _____ percent.

Accepted Answer

The answer of When the supply elasticity of a product...

Question 11

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

Accepted Answer

Price elasticity of supply measures the percentage change in quantity supplied in response to a percentage change in price.

Question 12

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Accepted Answer

The formula for calculating price elasticity of supply is (% change in quantity supplied / % change in price). In this case, the % change in price is 20% and the % change in quantity supplied is 10%, so the price elasticity of supply is (10 / 20) = 0.5. Therefore, the correct answer is D) 0.5.

Question 13

Acme Tools manufactures anvils, a forging tool.When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day.Using the midpoint formula, what is Acme's price elasticity of supply for anvils?

Accepted Answer

Price elasticity of supply = (% change in quantity supplied) / (% change in price)

Using the midpoint formula:

% change in quantity supplied = (new quantity - initial quantity) / [(new quantity + initial quantity)/2] * 100%
% change in quantity supplied = (4-1) / [(4+1)/2] * 100%
% change in quantity supplied = 200%

% change in price = (new price - initial price) / [(new price + initial price)/2] * 100%
% change in price = (13-7) / [(13+7)/2] * 100%
% change in price = 42.86%

Price elasticity of supply = 200% / 42.86%
Price elasticity of supply = 4.66

Since the answer choices are not continuous, we need to round to the nearest option, giving us a price elasticity of supply of 4. Therefore, the best choice is C, 0.5.

Question 14

Which of the following statements correctly describe the elasticities of demand for gasoline and automobiles?

Accepted Answer

The price elasticity of demand for gasoline is typically inelastic because it is a necessity for many people and there are often no close substitutes. The cross-price elasticity between gasoline and SUVs is likely negative because as the price of gasoline increases, demand for SUVs (which tend to be less fuel efficient) may decrease.

Question 15

If the price elasticity of supply is 0.75, it would imply that a _____.

Accepted Answer

The answer of If the price elasticity of supply is...

Question 16

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2
 Based on the information given in Table 19.2, margarine is:

Accepted Answer

From the table, we can see that as Ted's income increases, the quantity of margarine he purchases decreases. This indicates that margarine is an inferior good, meaning that as income increases, demand for the good decreases.

Question 17

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the price elasticity of demand for noodles is _____.

Accepted Answer

The answer of Scenario 19.1 The demand for noodles is...

Question 18

Arc elasticity is calculated as _____.

Accepted Answer

The correct formula for arc elasticity is (Q2-Q1)/[(Q2+Q1)/2] divided by (P2-P1)/[(P2+P1)/2]. The given code in option D falls under this formula.

Question 19

Which of the following situations is represented by a nearly horizontal supply curve?

Accepted Answer

The answer of Which of the following situations is represented...

Question 20

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2
 Based on the information given in Table 19.2, coffee would be considered:

Accepted Answer

The answer of The table below shows the quantities of...

Quiz 33: Elasticity: Demand and Supply

There are some special types of goods for which supply cannot change irrespective of the length of time allowed for change, such as Beethoven symphonies.The price elasticity of supply for these goods is _____.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the income elasticity of demand for noodles is _____.

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Supply curves applicable to shorter periods of time tend to:

Suppose the price of a product is reduced from $10 to $6 and the quantity demanded increases from 40 to 60 units.From this we can conclude that the price elasticity of demand over this price range is equal to _____.

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

When economists speak of the short run, they are referring to _____.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the quantity of noodles demanded at a price of $8 is _____.

If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?

When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _ the quantity supplied of the product by _ percent.

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Acme Tools manufactures anvils, a forging tool.When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day.Using the midpoint formula, what is Acme's price elasticity of supply for anvils?

Which of the following statements correctly describe the elasticities of demand for gasoline and automobiles?

If the price elasticity of supply is 0.75, it would imply that a _____.

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2 Based on the information given in Table 19.2, margarine is:

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the price elasticity of demand for noodles is _____.

Arc elasticity is calculated as _____.

Which of the following situations is represented by a nearly horizontal supply curve?

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2 Based on the information given in Table 19.2, coffee would be considered:

Quiz 33: Elasticity: Demand and Supply

There are some special types of goods for which supply cannot change irrespective of the length of time allowed for change, such as Beethoven symphonies.The price elasticity of supply for these goods is _____.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px.Assume that P = $8, I = 200, and Px = $10. Given the above equation, the income elasticity of demand for noodles is _____.

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Supply curves applicable to shorter periods of time tend to:

Suppose the price of a product is reduced from $10 to $6 and the quantity demanded increases from 40 to 60 units.From this we can conclude that the price elasticity of demand over this price range is equal to _____.

Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:

When economists speak of the short run, they are referring to _____.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px.Assume that P = $8, I = 200, and Px = $10. Given the above equation, the quantity of noodles demanded at a price of $8 is _____.

If 12 candy bars are demanded at $0.30 each and 4 candy bars are demanded at $0.50 each, what is the elasticity of demand over the price range from $0.30 to $0.50?

When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _____ the quantity supplied of the product by _____ percent.

A measure of the responsiveness of quantity supplied to changes in price is known as _____.

Ceteris paribus, if a 20 percent increase in the price of shoes leads to a 10 percent increase in the quantity supplied of shoes, then the price elasticity of supply is equal to _____.

Acme Tools manufactures anvils, a forging tool.When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day.Using the midpoint formula, what is Acme's price elasticity of supply for anvils?

Which of the following statements correctly describe the elasticities of demand for gasoline and automobiles?

If the price elasticity of supply is 0.75, it would imply that a _____.

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2 Based on the information given in Table 19.2, margarine is:

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2Px.Assume that P = $8, I = 200, and Px = $10. Given the above equation, the price elasticity of demand for noodles is _____.

Arc elasticity is calculated as _____.

Which of the following situations is represented by a nearly horizontal supply curve?

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 19.2 Based on the information given in Table 19.2, coffee would be considered:

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the income elasticity of demand for noodles is _____.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the quantity of noodles demanded at a price of $8 is _____.

When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _ the quantity supplied of the product by _ percent.

Scenario 19.1 The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x.Assume that P = $8, I = 200, and P_x= $10. Given the above equation, the price elasticity of demand for noodles is _____.