Question 1

The championship game will be held next weekend in your college's 40,000-seat stadium.The supply of tickets:
A) will increase because the price charged will be higher.
B) is price elastic.
C) is perfectly inelastic.
D) depends on which teams make it to the championship game.

Accepted Answer

Price volatility is common in markets in which demand curves fluctuate sharply and supply curves are highly inelastic.

Question 2

You read online that,at current rates of production,the yearly world supply of food is sufficient to feed the projected 2010 population of the earth,and that after 2010 there will be massive starvation.One assumption behind this prediction is that:
A) food supply is infinitely elastic.
B) the long run elasticity of supply of food is inelastic.
C) prices will allocate food supplies to only wealthy countries.
D) short run supply elasticity is greater than long run supply elasticity.

Accepted Answer

In the long-run elasticity of food supply is inelastic.

Question 3

Oil and oil products remain the main fuel for cars,planes,ships,and power plants.The amount of oil still in the earth is finite.According to this information,the supply of gasoline is relatively _______.
A) elastic
B) inelastic
C) unitary elastic
D) perfectly inelastic

Accepted Answer

Supply is relatively inelastic because supply is finite.

Question 4

Lakeville is a small community that completely surrounds a scenic lake up north.Lakeville's zoning regulations require that residential lots have at least one hundred feet of frontage,or shoreline,on the lake.The total shoreline of the lake is 5,000 feet.
Suppose there are currently 50 homes on the lake,each with one hundred feet of shoreline.If demand for lakefront homes increased,
A) there would be excess demand for lakefront homes that the market could not correct.
B) a new equilibrium would be established at a quantity greater than 50 and at a higher price.
C) a new equilibrium would be established at a quantity equal to 50 and at a higher price.
D) no new residents would be able to purchase a home on the lake because all of the lots are taken.

Accepted Answer

Since the demand is high,the price per lot would increase and the quantity supplied would also increase as there is incentive to build more homes.

Question 5

Antony's Pizza uses the same dough,sauce,and cheese for pizza and calzones.When the price of pizza is low Antony produces more calzones.For Antony,with respect to price,supply of pizza is ________ compared to supply at a pizza restaurant that does not serve calzones.
A) more inelastic
B) more elastic
C) unitary elastic
D) more unpredictable

Accepted Answer

In this case supply is more elastic.

Question 6

In 1985 a desert community stopped pumping from a 1000 foot well because it had run dry.In 2005 the price of water doubled.The community then drilled the well deeper and started pumping again.In this community,
A) the supply of water is perfectly inelastic because it is a finite resource.
B) water production faces increasing opportunity costs.
C) markets cannot reach equilibrium because there is a persistent shortage of water.
D) higher water prices can reduce quantity demanded,but cannot increase quantity supplied.

Accepted Answer

Water production faces increasing opportunity costs.

Question 7

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.
A) higher
B) lower
C) the same
D) more variable

Accepted Answer

The price elasticity would be lower.

Question 8

Mike knows how to make hamburgers (like many other people)and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is __________ because the inputs to production are __________.
A) inelastic;mobile
B) inelastic;immobile
C) inelastic;flexible
D) elastic;flexible

Accepted Answer

Supply is perfectly elastic with respect to price if elasticity of supply is infinite.

Question 9

Lakeville is a small community that completely surrounds a scenic lake up north.Lakeville's zoning regulations require that residential lots have at least one hundred feet of frontage,or shoreline,on the lake.The total shoreline of the lake is 5,000 feet.
There are currently 40 homes on the lake.If demand for lakefront property in Lakeville increased,
A) the price of lakefront property would not change because there is excess supply.
B) the quantity supplied of lakefront property would decrease because there is excess demand.
C) the quantity supplied of lakefront property would be zero because there is no room for new residents.
D) the quantity supplied of lakefront property would increase,and the price per lot would increase.

Accepted Answer

Since the demand is high,the price per lot would increase and the quantity supplied would also increase as there is incentive to build more homes.

Question 10

Lakeville is a small community that completely surrounds a scenic lake up north.Lakeville's zoning regulations require that residential lots have at least one hundred feet of frontage,or shoreline,on the lake.The total shoreline of the lake is 5,000 feet.
Assuming that the zoning regulations in Lakeville remain enforced,elasticity of supply of lakefront property is,
A) infinite at a quantity of 50.
B) greater than zero at quantities less than 50 and zero at quantity of 50.
C) less than zero at quantities through 100.
D) positive for all quantities.

Accepted Answer

Since the demand is high,the price per lot would increase and the quantity supplied would also increase as there is incentive to build more homes.

Quiz 4: Elasticity

The championship game will be held next weekend in your college's 40,000-seat stadium.The supply of tickets:

You read online that,at current rates of production,the yearly world supply of food is sufficient to feed the projected 2010 population of the earth,and that after 2010 there will be massive starvation.One assumption behind this prediction is that:

Oil and oil products remain the main fuel for cars,planes,ships,and power plants.The amount of oil still in the earth is finite.According to this information,the supply of gasoline is relatively _______.

Antony's Pizza uses the same dough,sauce,and cheese for pizza and calzones.When the price of pizza is low Antony produces more calzones.For Antony,with respect to price,supply of pizza is ________ compared to supply at a pizza restaurant that does not serve calzones.

In 1985 a desert community stopped pumping from a 1000 foot well because it had run dry.In 2005 the price of water doubled.The community then drilled the well deeper and started pumping again.In this community,

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.

Mike knows how to make hamburgers (like many other people) and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is because the inputs to production are .

Quiz 4: Elasticity

The championship game will be held next weekend in your college's 40,000-seat stadium.The supply of tickets:

You read online that,at current rates of production,the yearly world supply of food is sufficient to feed the projected 2010 population of the earth,and that after 2010 there will be massive starvation.One assumption behind this prediction is that:

Oil and oil products remain the main fuel for cars,planes,ships,and power plants.The amount of oil still in the earth is finite.According to this information,the supply of gasoline is relatively _______.

Antony's Pizza uses the same dough,sauce,and cheese for pizza and calzones.When the price of pizza is low Antony produces more calzones.For Antony,with respect to price,supply of pizza is ________ compared to supply at a pizza restaurant that does not serve calzones.

In 1985 a desert community stopped pumping from a 1000 foot well because it had run dry.In 2005 the price of water doubled.The community then drilled the well deeper and started pumping again.In this community,

For OutBack Steakhouse,seating capacity is limited in the short run.In the long run they can add as many seats as they want.Therefore,the price elasticity of supply for the meals in OutBack would be _____ in the short run than in the long run.

Mike knows how to make hamburgers (like many other people) and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is __________ because the inputs to production are __________.

Mike knows how to make hamburgers (like many other people) and got a minimum wage job at Burger King.With respect to price elasticity of supply,the supply curve for hamburgers is because the inputs to production are .