Question 1

Vincent Van Gogh paintings have a price elasticity of supply
A)equal to 2.0.
B)equal to 1.0.
C)close to 0.0.
D)approaching infinity.

Accepted Answer

The price elasticity of supply measures the responsiveness of quantity supplied to a change in price. A high price elasticity of supply means that a small change in price leads to a large change in quantity supplied. On the other hand, a low or close to zero price elasticity of supply means that a change in price has little impact on the quantity supplied. In the case of Vincent Van Gogh paintings, the supply is very limited and there is a fixed number of paintings available. Therefore, the price elasticity of supply is close to zero because a change in price will have little impact on the quantity supplied.

Question 2

Why is the price elasticity of supply greater if there is more time for adjustment to an increase in the price of an item?

Accepted Answer

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

Question 3

The longer the time period that suppliers have to adjust to price changes,the
A)greater will be the price elasticity of supply.
B)lower will be the price elasticity of supply.
C)lower will be the price elasticity of demand.
D)greater will be the price elasticity of demand.

Accepted Answer

When suppliers have more time to adjust to price changes, they are more responsive and flexible in changing their production levels. This means that their supply becomes more elastic, and they can increase or decrease their output more easily in response to changes in price. Therefore, the longer the time period that suppliers have to adjust to price changes, the greater will be the price elasticity of supply.

Question 4

If price elasticity of supply is less than 1,
A)supply is elastic.
B)demand is elastic.
C)demand is inelastic.
D)supply is inelastic.

Accepted Answer

If price elasticity of supply is less than 1, it means that a change in price has a proportionately smaller effect on the quantity supplied. This indicates that supply is inelastic.

Question 5

If the price elasticity of supply is equal to 1,we would say the supply of the item is
A)unit elastic.
B)inelastic.
C)elastic.
D)perfectly elastic.

Accepted Answer

A price elasticity of supply of 1 means that the percentage change in quantity supplied is equal to the percentage change in price. This is exactly what is meant by unit elasticity. Therefore, the supply of the item can be classified as unit elastic.

Question 6

Which of the following statements is correct?
A)Supply is more elastic in the short run than in long run.
B)Supply is more elastic in the long run than in short run.
C)Price elasticity of supply is constant along the supply curve.
D)Price elasticity of supply is always a negative number.

Accepted Answer

In the short run, producers are often unable to quickly respond to changes in demand or price due to fixed inputs/technologies. However, in the long run, producers have more flexibility to adjust their production process and inputs, making supply more elastic.

Option A is incorrect because the statement is opposite to the correct explanation.

Option C is incorrect because price elasticity of supply changes along the supply curve due to varying degrees of responsiveness to changes in price at different price levels.

Option D is incorrect because price elasticity of supply can be either positive or negative, depending on whether the quantity supplied increases or decreases in response to a change in price.

Question 7

A supply curve that is parallel to the quantity axis is
A)perfectly elastic.
B)perfectly inelastic.
C)relatively inelastic.
D)unitary elastic.

Accepted Answer

The answer of A supply curve that is parallel to...

Question 8

The price elasticity of supply is 0.6.This means that
A)a $10 increase in price would increase quantity supplied by 60.
B)a 150 percent increase in price would increase quantity supplied by 90 percent.
C)a 50 percent increase in quantity will occur when price increases by 30 percent.
D)a 10 percent increase in quantity will occur when price increases by 6 percent.

Accepted Answer

The answer of The price elasticity of supply is 0.6.This...

Question 9

If the price of hamburger meat increases by 20 percent and the quantity supplied by meat packing companies increases by 30 percent,what is the price elasticity of supply?
A)1.65
B)1.20
C)0.67
D)1.50

Accepted Answer

The answer of If the price of hamburger meat increases...

Question 10

Tickets for the Super Bowl are an example of supply that is
A)perfectly elastic.
B)unit elastic.
C)slightly inelastic.
D)perfectly inelastic.

Accepted Answer

Super Bowl tickets are an example of a perfectly inelastic supply because the number of tickets available is fixed and does not change regardless of the price.

Question 11

For most items,we find the price elasticity of supply will be
A)negative.
B)positive.
C)invisible.
D)inverse.

Accepted Answer

The price elasticity of supply measures the responsiveness of quantity supplied to changes in price. If there is an increase in price, suppliers will be more willing to supply more of the item in question, resulting in a positive relationship between price and quantity supplied. Therefore, the price elasticity of supply is generally positive.

Question 12

A supply curve that is parallel to the price axis is
A)perfectly elastic.
B)perfectly inelastic.
C)relatively inelastic.
D)unitary elastic.

Accepted Answer

A supply curve that is parallel to the price axis means that there is no change in quantity supplied as price changes. This type of supply is called perfectly inelastic.

Question 13

Why is time such an important determinant in the elasticity of supply? Is time also important in determining price elasticity of demand? Explain.

Accepted Answer

The answer of Why is time such an important determinant...

Quiz 6: Demand and Supply Elasticity

Vincent Van Gogh paintings have a price elasticity of supply

Why is the price elasticity of supply greater if there is more time for adjustment to an increase in the price of an item?

The longer the time period that suppliers have to adjust to price changes,the

If price elasticity of supply is less than 1,

If the price elasticity of supply is equal to 1,we would say the supply of the item is

Which of the following statements is correct?

A supply curve that is parallel to the quantity axis is

The price elasticity of supply is 0.6.This means that

If the price of hamburger meat increases by 20 percent and the quantity supplied by meat packing companies increases by 30 percent,what is the price elasticity of supply?

Tickets for the Super Bowl are an example of supply that is

For most items,we find the price elasticity of supply will be

A supply curve that is parallel to the price axis is

Why is time such an important determinant in the elasticity of supply? Is time also important in determining price elasticity of demand? Explain.