Question 1

The elasticity of supply measures:

Accepted Answer

The elasticity of supply measures how responsive the quantity supplied is to a change in price. Option A is the formula for the price elasticity of demand. Option B only refers to the change in quantity supplied, but does not measure the responsiveness to price changes. Option C refers only to the change in price, but does not measure the responsiveness of supply.

Question 2

The elasticity of supply measures:

Accepted Answer

The elasticity of supply measures how responsive the quantity supplied is to a change in the price of a good or service. This means that if there is a small change in the price of a good or service, the elasticity of supply indicates the percentage change in the quantity supplied. For example, if the price of apples increases by 10%, the elasticity of supply measures the percentage increase in the quantity of apples supplied due to that price change.

Question 3

Because of aging requirements it takes many years to make good Scotch. If a technology were invented that made it possible to create good Scotch literally overnight, how would the short-run supply of good Scotch change?

Accepted Answer

The invention of a technology that can make good Scotch overnight would increase the short-run supply of good Scotch, making it easier for producers to respond quickly to changes in demand. This would result in a more elastic supply curve, as producers would be able to produce more or less Scotch at a lower cost than before, depending on market conditions.

Question 4

The supply of ______ tends to be more elastic.

Accepted Answer

Manufactured goods tend to have more elastic supply because production can be adjusted more easily in response to price changes compared to raw materials or necessary goods.

Question 5

U.S. Highway 12 is part of a crucial two-lane artery from the seaports in Washington State to the tar sands in Canada. Extracting oil from the tar sands requires very large equipment and transporting it takes up both lanes of U.S. Highway12. In August of 2010, Idaho granted ConocoPhilips a road permit that allowed it to transport four oil-processing units. Without this permit, ConocoPhilips would have had to transport those units a much longer distance to get them to their destination. If permits for this highway were not allowed, how would that affect the elasticity of which curve in the market for oil?

Accepted Answer

If permits for this highway were not allowed, it would make it more difficult and costly for oil companies to transport their equipment and extract oil from the tar sands. This would decrease the quantity of oil supplied in the market, making the supply curve less elastic.

Question 6

Economic theory suggests that gun buyback programs:

Accepted Answer

Gun buyback programs do not reduce the number of guns on city streets because they are not effective in reaching those who are most likely to commit crimes with firearms. Additionally, some individuals may use the money they receive from the buyback program to purchase new guns, resulting in a neutral or even negative impact on the overall number of guns in circulation. Economic theory suggests that for a program to effectively reduce the number of guns on the streets, the supply curve of guns would need to be perfectly inelastic, meaning that the quantity supplied would not change in response to price changes.

Question 7

Gun buyback programs will be less effective if the:

Accepted Answer

The supply of guns is more elastic, meaning that the quantity supplied will increase more in response to a price increase. This will make it more difficult for gun buyback programs to reduce the number of guns in circulation, as people will be more likely to sell their guns to private buyers instead of turning them in to the government.

Question 8

The supply of ancient Egyptian papyrus manuscripts is probably:

Accepted Answer

The supply of ancient Egyptian papyrus manuscripts is limited because they are no longer being produced, therefore it is inelastic.

Question 9

Figure: Supply Elasticity  Refer to the figure. It shows two different supply curves. Based on the graph, which statement is TRUE?

Accepted Answer

The answer of Figure: Supply Elasticity  Refer to the...

Question 10

Which of the following mostly likely has a perfectly inelastic supply curve?

Accepted Answer

Prehistoric cave paintings have a perfectly inelastic supply because they are unique and cannot be reproduced or increased in quantity.

Question 11

The fundamental determinant of the elasticity of supply is:

Accepted Answer

The elasticity of supply depends on how quickly the per-unit cost of production increases with an increase in production. If the per-unit cost of production increases significantly with a slight increase in production, then the supply is considered inelastic; if the per-unit cost of production does not increase significantly even with a significant increase in production, then the supply is considered elastic. The number of substitute goods, the price of the good, and the rate of change of quantity demanded as compared to the quantity supplied are not the determinants of the elasticity of supply.

Question 12

The elasticity of supply measures:

Accepted Answer

The elasticity of supply measures how responsive quantity supplied is to changes in price. It indicates the degree to which the quantity supplied will change when the price of a good changes, and is calculated as the percentage change in quantity supplied divided by the percentage change in price.

Question 13

Economic theory suggests that permanent gun buyback programs:

Accepted Answer

The answer of Economic theory suggests that permanent gun buyback...

Question 14

For a price increase from $100 to $110, supply is the most elastic when quantity supplied:

Accepted Answer

When the price increases from $100 to $110, if the quantity supplied increases from 20 to 40, it indicates that the supply is very responsive to changes in the price. Hence, the supply is the most elastic in this scenario. A and D are incorrect because an increase in quantity from 20 to 30 or 22 indicates a lesser response to the change in price. The option C is also incorrect because elasticity requires a change in quantity supplied in response to a change in price. If quantity supplied does not change, it indicates perfect inelasticity.

Question 15

Istanbul's Dolmabaçe Palace, built near the end of the Ottoman Empire, rests on a former garden that was created in the eighteenth century at great expense by filling in a bay. (Dolmabaçe means "filled-in garden" in Turkish.) What does the Dolmabaçe Palace teach us about the elasticity of supply of land?

Accepted Answer

The fact that the Dolmabaçe Palace was built on a former garden that had to be filled in at great expense suggests that the supply of land in Istanbul is not perfectly inelastic, but also not perfectly elastic. Alternatively, if the supply of land were perfectly elastic, it would not have been necessary to fill in a bay to create additional land for the palace. Therefore, D is the best answer.

Question 16

In Medieval Europe, there were two basic types of waterwheel. In an undershot wheel, water flows below the wheel to turn it. In an overshot wheel, water flows over the top of the wheel to turn it. Because the overshot wheel cooperates better with gravity, it is more efficient than an undershot wheel but it also requires a hill. Which wheel has a more inelastic supply curve and why?

Accepted Answer

An overshot wheel has a more inelastic supply curve because it requires specific geographical conditions (a hill) to be built, making suitable locations more limited and thus less responsive to changes in demand.

Question 17

When the supply curve in the Sudanese slave trade is perfectly ________, every slave bought by the redeemers results in/is ________ held in captivity.

Accepted Answer

When the supply curve is perfectly inelastic, it means that there is no change in the quantity supplied regardless of the change in price. In the context of the Sudanese slave trade, it implies that every slave bought by the redeemers results in one less slave held in captivity. Therefore, option B is the correct choice.

Question 18

Table: Supply Curve

In the table, which supply curve is most price elastic over the range of prices considered?

Accepted Answer

Supply curve C is the most price elastic because the percentage change in quantity supplied is greater than the percentage change in price over the range of prices considered. This indicates that suppliers are very responsive to changes in price and will adjust their production levels significantly in response to even small changes in price.

Question 19

In The Beautiful Tree, Dr. James Tooley describes how he found, in developing country after developing country, countless private schools aimed at educating the poor's children. The schools are completely self-funded, relying on tuition to pay salaries and upkeep. Although the teachers are effective, the schools are very basic: large playgrounds and modern building construction are very rare. Based on this information, what is the elasticity of the supply of schools?

Accepted Answer

The elasticity of the supply of schools is elastic because the private schools aimed at educating the poor's children are relatively easy to establish, despite being basic in terms of infrastructure. This is evidenced by the fact that they exist in developing country after developing country and are completely self-funded through tuition. Therefore, if there is an increase in demand for schools in these areas, entrepreneurs can quickly establish new ones to meet the demand.

Question 20

The supply of a good tends to be more elastic if:

Accepted Answer

If production can be expanded without causing a big increase in the price of its inputs, then the producer can increase output without incurring significant cost increases. This means that the producer can respond more easily to changes in price by adjusting output. Therefore, the supply of the good would be more elastic.

Quiz 5: Elasticity and Its Applications

The elasticity of supply measures:

The elasticity of supply measures:

Because of aging requirements it takes many years to make good Scotch. If a technology were invented that made it possible to create good Scotch literally overnight, how would the short-run supply of good Scotch change?

The supply of ______ tends to be more elastic.

Economic theory suggests that gun buyback programs:

Gun buyback programs will be less effective if the:

The supply of ancient Egyptian papyrus manuscripts is probably:

Figure: Supply Elasticity Refer to the figure. It shows two different supply curves. Based on the graph, which statement is TRUE?

Which of the following mostly likely has a perfectly inelastic supply curve?

The fundamental determinant of the elasticity of supply is:

The elasticity of supply measures:

Economic theory suggests that permanent gun buyback programs:

For a price increase from $100 to $110, supply is the most elastic when quantity supplied:

When the supply curve in the Sudanese slave trade is perfectly , every slave bought by the redeemers results in/is held in captivity.

Table: Supply Curve In the table, which supply curve is most price elastic over the range of prices considered?

The supply of a good tends to be more elastic if: