Question 1

The price elasticity of supply is a unit-free measure and uses percentage changes in quantity supplied and price to measure how sensitive supply is to a change in price.

Accepted Answer

This statement is true. The price elasticity of supply is calculated using the percentage change in the quantity supplied and the percentage change in the price, meaning it is a unit-free measure.

Question 2

A perfectly elastic supply curve is vertical,and a perfectly elastic demand curve is horizontal.

Accepted Answer

A perfectly elastic supply curve is horizontal, indicating that suppliers are willing to supply any quantity at a specific price. A perfectly elastic demand curve is vertical, indicating that consumers are willing to buy any quantity at a specific price.

Question 3

When a higher price cannot bring about any increase in the quantity supplied,the supply is
A)perfectly elastic.
B)unit elastic.
C)zero.
D)perfectly inelastic.
E)infinity.

Accepted Answer

When a higher price cannot bring about any increase in the quantity supplied, the supply is perfectly inelastic. This means that the quantity supplied remains the same regardless of price changes.

Question 4

Supply is elastic if the quantity supplied responds substantially to a change in price,and supply is inelastic if the quantity supplied responds only slightly to a change in price.

Accepted Answer

This statement correctly defines the concepts of elastic and inelastic supply.

Question 5

When a given percentage change in the price leads to a larger percentage change in the quantity supplied,supply is said to be
A)elastic.
B)unit elastic.
C)inelastic.
D)infinitely elastic.
E)perfectly inelastic.

Accepted Answer

When a given percentage change in price results in a larger percentage change in the quantity supplied, it indicates that suppliers are very sensitive to changes in price. This is known as elastic supply.

Question 6

If a 2 percent increase in price results in a 1 percent increase in the quantity supplied,the price elasticity of supply is 2.

Accepted Answer

The price elasticity of supply in this scenario would be 0.5, not 2. Price elasticity of supply measures the responsiveness of quantity supplied to a change in price, and is calculated as the percentage change in quantity supplied divided by the percentage change in price. In this case, a 2 percent increase in price results in a 1 percent increase in quantity supplied, which translates to a price elasticity of supply of (1%/2%) = 0.5.

Question 7

The price elasticity of supply is always negative.

Accepted Answer

The price elasticity of supply can be positive, zero or infinite. It is only negative when the supply curve slopes upward, which is rare in real-world situations.

Question 8

If supply is perfectly elastic,then the supply curve must
A)be vertical.
B)be horizontal.
C)be upward sloping.
D)be downward sloping.
E)have a slope of zero.

Accepted Answer

If supply is perfectly elastic, it means that any increase or decrease in demand will be met with an equal change in supply. This implies that the quantity supplied can change by any amount without affecting the market price. Therefore, the supply curve must be horizontal.

Question 9

Elasticity of supply is
A)the responsiveness of supply to changes in costs.
B)the percentage change in quantity supplied due to a percentage change in price.
C)the responsiveness of the price to changes in supply.
D)1 minus the elasticity of demand.
E)the change in quantity supplied due to a change in quantity demanded.

Accepted Answer

Elasticity of supply is the percentage change in quantity supplied due to a percentage change in price. It measures the responsiveness of quantity supplied to changes in price.

Question 10

A price elasticity of supply of 1.5 implies that
A)a 20 percent increase in the quantity supplied increases the price by 30 percent.
B)total revenue is 1.5 times total cost.
C)a 20 percent increase in the price increases the quantity supplied by 30 percent.
D)a 20-unit increase in supply reduces the price by $30.
E)a $20 increase in the price increases the quantity supplied by 30 units.

Accepted Answer

A price elasticity of supply of 1.5 means that a 1% increase in price will result in a 1.5% increase in quantity supplied. Therefore, a 20% increase in price will lead to a 30% increase in quantity supplied (20% x 1.5 = 30%).

Question 11

If supply is perfectly inelastic,then the price elasticity of supply is infinity.

Accepted Answer

If supply is perfectly inelastic, it means that the quantity supplied remains constant regardless of changes in price. In this case, the price elasticity of supply is zero, not infinity.

Question 12

The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.

Accepted Answer

This is the correct definition of price elasticity of supply.

Question 13

Price elasticity of supply is 1 minus the price elasticity of demand.

Accepted Answer

Price elasticity of supply measures the responsiveness of the quantity supplied to a change in price, while price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. They are two separate concepts and are not directly related to each other. Therefore, price elasticity of supply cannot be calculated simply by subtracting the price elasticity of demand from 1.

Question 14

The price elasticity of supply is a measure of how
A)long it takes for producers to change technology.
B)sensitive producers are to a change in technology.
C)long it takes for producers to change their prices.
D)sensitive producers are to a change in input prices.
E)sensitive producers are to a change in output price.

Accepted Answer

The price elasticity of supply measures the degree of responsiveness of the quantity supplied of a good or service to a change in its price. Therefore, it assesses how sensitive producers are to a change in output price.

Question 15

If the quantity supplied of a good is fixed at 100 units at all price levels,then its price elasticity of supply is
A)perfectly elastic.
B)unit elastic.
C)perfectly inelastic.
D)zero.
E)undefined.

Accepted Answer

When the quantity supplied of a good is fixed at all price levels, it means that no matter how much the price changes, the quantity supplied will remain the same. This indicates that the supply of the good is perfectly inelastic, as the price elasticity of supply is zero.

Question 16

Assume that a firm makes available 50 more units of a good at a price of $2 than it made available when the price was $1.What is the price elasticity of supply?
A)It cannot be determined from the information given.
B).02
C)25
D)50
E).04

Accepted Answer

The answer of Assume that a firm makes available 50...

Question 17

If the quantity supplied of a product stays the same no matter what its price,then the elasticity of supply of the product is
A)perfectly elastic.
B)unit elastic.
C)zero.
D)perfectly inelastic.
E)infinity.

Accepted Answer

If the quantity supplied of a product stays the same no matter what its price, then the percentage change in quantity supplied is 0 for any percentage change in price. This makes the elasticity of supply of the product perfectly inelastic.

Question 18

Which of the following is the equation for price elasticity of supply?
A) 
B) 
C) 
D) 
E)

Accepted Answer

The answer of Which of the following is the equation...

Question 19

Which of the following formulas is a correct expression of the price elasticity of supply?
A) 
B) 
C) 
D) 
E)

Accepted Answer

The answer of Which of the following formulas is a...

Question 20

Supply may be elastic,unit elastic,or inelastic.

Accepted Answer

This statement is true. The elasticity of supply measures the responsiveness of quantity supplied to changes in price. If the percentage change in quantity supplied is greater than the percentage change in price, supply is considered to be elastic. If the percentage change in quantity supplied is equal to the percentage change in price, supply is considered to be unit elastic. If the percentage change in quantity supplied is less than the percentage change in price, supply is considered to be inelastic.

Quiz 4: Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

The price elasticity of supply is a unit-free measure and uses percentage changes in quantity supplied and price to measure how sensitive supply is to a change in price.

A perfectly elastic supply curve is vertical,and a perfectly elastic demand curve is horizontal.

When a higher price cannot bring about any increase in the quantity supplied,the supply is

Supply is elastic if the quantity supplied responds substantially to a change in price,and supply is inelastic if the quantity supplied responds only slightly to a change in price.

When a given percentage change in the price leads to a larger percentage change in the quantity supplied,supply is said to be

If a 2 percent increase in price results in a 1 percent increase in the quantity supplied,the price elasticity of supply is 2.

The price elasticity of supply is always negative.

If supply is perfectly elastic,then the supply curve must

Elasticity of supply is

A price elasticity of supply of 1.5 implies that

If supply is perfectly inelastic,then the price elasticity of supply is infinity.

The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.

Price elasticity of supply is 1 minus the price elasticity of demand.

The price elasticity of supply is a measure of how

If the quantity supplied of a good is fixed at 100 units at all price levels,then its price elasticity of supply is

Assume that a firm makes available 50 more units of a good at a price of $2 than it made available when the price was $1.What is the price elasticity of supply?

If the quantity supplied of a product stays the same no matter what its price,then the elasticity of supply of the product is

Which of the following is the equation for price elasticity of supply?

Which of the following formulas is a correct expression of the price elasticity of supply?

Supply may be elastic,unit elastic,or inelastic.