Question 1

Goods that can be produced using rare productive resources have a ________ elasticity of supply.The greater the amount of time available after a price change,the ________ is the elasticity of supply.
A)low;smaller
B)high;greater
C)high;smaller
D)low;greater
E)high;more inelastic

Accepted Answer

Goods that require rare productive resources tend to have a low elasticity of supply because it's difficult to increase production quickly or substantially. The more time producers have to adjust to a price change, the greater the elasticity of supply becomes, as they can find more resources, improve technology, or increase capacity.

Question 2

In the market for farm crops,momentary supply is ________ and short-run supply is ________.
A)less elastic than short-run supply;less elastic than long-run supply
B)more elastic than short-run supply;more elastic than long-run supply
C)perfectly elastic;unit elastic
D)unit elastic;perfectly elastic
E)perfectly elastic;perfectly inelastic

Accepted Answer

Momentary supply is less elastic than short-run supply because it reflects the immediate response of suppliers to price changes, with no time for adjustment. Short-run supply is less elastic than long-run supply because, in the short run, there are some fixed inputs, but in the long run, all inputs can be adjusted, making supply more responsive to price changes.

Question 3

The demand for corn increases.As a result,the price of corn ________,and the less elastic the supply of corn,the ________ will be the effect on the price.
A)falls;smaller
B)falls;greater
C)rises;smaller
D)rises;greater
E)does not change;smaller

Accepted Answer

When demand for corn increases, the price of corn rises according to the law of supply and demand. Additionally, the less elastic the supply of corn, the greater the effect on the price since suppliers are unable to easily increase their quantity supplied in response to the increase in demand. Therefore, the rise in price will be greater if the supply of corn is less elastic.

Question 4

When a supply curve
A)intersects the origin,the good has an elasticity of supply equal to 1.
B)is vertical,the good has an elasticity of supply equal to infinity.
C)is horizontal,the good has an elasticity of supply equal to zero.
D)intersects the origin,the good has an elasticity of supply equal to zero.
E)intersects the origin,the good has an elasticity of supply that is negative.

Accepted Answer

The answer of When a supply curve
A)intersects the origin,the good...

Question 5

You are told that a 5 percent increase in the price of a good increases the quantity supplied by 10 percent after one month.Supply of this good is ________.This good is most likely produced using productive resources that are ________.
A)inelastic;plentiful or easily obtained
B)decreasing;unique or rare
C)elastic;plentiful or easily obtained
D)unit elastic;unique or rare
E)elastic;unique or rare

Accepted Answer

The fact that a 5% increase in price leads to a 10% increase in quantity supplied indicates that the supply is elastic. This means that the producers are able to increase their quantity supplied easily in response to a change in price. Additionally, the use of plentiful or easily obtained productive resources would also suggest that supply is elastic. Therefore, choice C is the best answer.

Question 6

If the supply curve passes through the origin,then the price elasticity of supply is
A)zero.
B)1.
C)-1.
D)greater than 1.
E)less than 1 but greater than zero.

Accepted Answer

When the supply curve passes through the origin, it indicates a unitary price elasticity of supply, meaning the percentage change in quantity supplied is equal to the percentage change in price, hence the elasticity is 1.

Quiz 4: Elasticity

Goods that can be produced using rare productive resources have a elasticity of supply.The greater the amount of time available after a price change,the is the elasticity of supply.

In the market for farm crops,momentary supply is and short-run supply is .

The demand for corn increases.As a result,the price of corn ,and the less elastic the supply of corn,the will be the effect on the price.

When a supply curve

You are told that a 5 percent increase in the price of a good increases the quantity supplied by 10 percent after one month.Supply of this good is .This good is most likely produced using productive resources that are .

If the supply curve passes through the origin,then the price elasticity of supply is