#1
1. What is price elasticity of demand?
A measure of the responsiveness of quantity demanded to a change in price.
The total quantity demanded in the market.
The percentage change in quantity supplied.
The total revenue earned by a firm.
#2
3. Which of the following goods is likely to have a more elastic supply?
Handmade artisanal crafts
Mass-produced generic items
Rare and unique collector's items
Basic necessities like water
#3
5. How does time influence the elasticity of supply?
Short-run supply is generally more elastic than long-run supply.
Long-run supply is generally more elastic than short-run supply.
Time has no impact on supply elasticity.
Elasticity of supply is always the same regardless of time.
#4
7. Which factor is NOT a determinant of the elasticity of supply?
Availability of substitutes in production
Time period considered
Percentage of income spent on the good
Flexibility of production inputs
#5
9. How does the concept of joint supply relate to elasticity?
Joint supply has no relationship with elasticity.
It refers to the simultaneous production of multiple goods from the same inputs.
It implies that two goods are perfect substitutes.
Joint supply indicates perfectly inelastic supply.
#6
12. If the percentage change in quantity supplied is greater than the percentage change in price, what is the elasticity of supply?
Elastic
Inelastic
Unitary elastic
Perfectly elastic
#7
14. In the context of supply elasticity, what does a negative cross-price elasticity between two goods imply?
The goods are substitutes.
The goods are complements.
There is no relationship between the goods.
Both goods have perfectly elastic supply.
#8
2. If a good has perfectly inelastic supply, what happens to quantity supplied when the price changes?
Quantity supplied remains constant.
Quantity supplied increases.
Quantity supplied decreases.
Quantity supplied becomes zero.
#9
4. What is the formula for price elasticity of supply?
Percentage change in quantity supplied / Percentage change in price
Percentage change in price / Percentage change in quantity supplied
Total quantity supplied / Price change
Total revenue / Quantity supplied
#10
6. What does it mean if the price elasticity of supply is greater than 1?
Supply is inelastic.
Supply is elastic.
Supply is perfectly elastic.
Supply is perfectly inelastic.
#11
8. In the context of supply elasticity, what is the meaning of a perfectly elastic supply curve?
The quantity supplied is fixed, regardless of price changes.
Any quantity can be supplied at a specific price, but none at a different price.
The supply curve is a straight vertical line.
The supply curve is a straight horizontal line.
#12
10. Which of the following is a characteristic of goods with perfectly inelastic supply?
Availability of close substitutes
Producers can easily switch production to other goods
Necessities with few alternative uses
Luxury goods with many alternative uses
#13
11. What happens to the price elasticity of supply when producers can easily switch between different goods?
It becomes more elastic.
It becomes more inelastic.
It remains constant.
It becomes perfectly elastic.
#14
13. How does technological advancement usually affect the elasticity of supply for a product?
It makes supply more elastic.
It makes supply more inelastic.
It has no impact on supply elasticity.
It makes supply perfectly elastic.