#1
1. What is price elasticity of demand?
A measure of the responsiveness of quantity demanded to a change in price.
ExplanationResponsiveness of demand to price changes.
#2
3. Which of the following goods is likely to have a more elastic supply?
Mass-produced generic items
ExplanationGeneric items tend to have more elastic supply.
#3
5. How does time influence the elasticity of supply?
Long-run supply is generally more elastic than short-run supply.
ExplanationLong-run supply is more elastic.
#4
7. Which factor is NOT a determinant of the elasticity of supply?
Percentage of income spent on the good
ExplanationIncome share spent isn't a determinant of supply elasticity.
#5
9. How does the concept of joint supply relate to elasticity?
It refers to the simultaneous production of multiple goods from the same inputs.
ExplanationSimultaneous production of multiple goods from same inputs.
#6
12. If the percentage change in quantity supplied is greater than the percentage change in price, what is the elasticity of supply?
Elastic
ExplanationElasticity is greater than 1.
#7
14. In the context of supply elasticity, what does a negative cross-price elasticity between two goods imply?
The goods are complements.
ExplanationNegative cross-price elasticity implies complementary goods.
#8
2. If a good has perfectly inelastic supply, what happens to quantity supplied when the price changes?
Quantity supplied remains constant.
ExplanationSupply remains unchanged despite price changes.
#9
4. What is the formula for price elasticity of supply?
Percentage change in quantity supplied / Percentage change in price
ExplanationFormula: %ΔQ / %ΔP
#10
6. What does it mean if the price elasticity of supply is greater than 1?
Supply is elastic.
ExplanationElastic supply: %ΔQ > %ΔP
#11
8. In the context of supply elasticity, what is the meaning of a perfectly elastic supply curve?
Any quantity can be supplied at a specific price, but none at a different price.
ExplanationQuantity infinitely supplied at a price but none at others.
#12
10. Which of the following is a characteristic of goods with perfectly inelastic supply?
Necessities with few alternative uses
ExplanationNecessities with limited substitutes.
#13
11. What happens to the price elasticity of supply when producers can easily switch between different goods?
It becomes more elastic.
ExplanationElasticity increases when switching between goods is easy.
#14
13. How does technological advancement usually affect the elasticity of supply for a product?
It makes supply more elastic.
ExplanationTechnological advancement increases supply elasticity.