Question 1

Generally,a firm is more willing and able to increase quantity supplied in response to a price change when

Accepted Answer

A) the relevant time period is short rather than long. 
B) the relevant time period is long rather than short. 
C) supply is inelastic. 
D) the firm is experiencing capacity problems. 
A) the relevant time period is short rather than long. 
B) the relevant time period is long rather than short. 
C) supply is inelastic. 
D) the firm is experiencing capacity problems. B

Question 2

Scenario 5-3
Suppose that the supply of aged cheddar cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%.
-Refer to Scenario 5-3.The price elasticity of supply for bread could be

Accepted Answer

A) -1. 
B) 0. 
C) 0.5. 
D) 1.5. 
A) -1. 
B) 0. 
C) 0.5. 
D) 1.5. D

Question 3

Figure 5-18  
-Refer to Figure 5-18.Using the midpoint method,what is the price elasticity of supply between $4 and $5?

Accepted Answer

A) 0.50 
B) 0.56 
C) 1.80 
D) 2.00 
A) 0.50 
B) 0.56 
C) 1.80 
D) 2.00 C

Question 4

A manufacturer produces 1,000 units,regardless of the market price.For this firm,the price elasticity of supply is

Accepted Answer

A) infinity. 
B) zero. 
C) one. 
D) negative one. 
A) infinity. 
B) zero. 
C) one. 
D) negative one.

Question 5

Figure 5-18  
-Refer to Figure 5-18.Using the midpoint method,what is the price elasticity of supply between $5 and $6?

Accepted Answer

A) 0.60 
B) 0.64 
C) 1.57 
D) 1.67 
A) 0.60 
B) 0.64 
C) 1.57 
D) 1.67

Question 6

At price of $1.20,a local pencil manufacturer is willing to supply 150 boxes per day.At a price of $1.40,the manufacturer is willing to supply 170 boxes per day.Using the midpoint method,the price elasticity of supply is about

Accepted Answer

A) 2.0. 
B) 1.23. 
C) 1.00. 
D) 0.81. 
A) 2.0. 
B) 1.23. 
C) 1.00. 
D) 0.81.

Question 7

Figure 5-14  
-Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $16 and $40?

Accepted Answer

A) 0.125 
B) 0.86 
C) 1.0 
D) 2.5 
A) 0.125 
B) 0.86 
C) 1.0 
D) 2.5

Question 8

Suppose the price elasticity of supply for minivans is 0.3 in the short run and 1.2 in the long run.If an increase in the demand for minivans causes the price of minivans to increase by 5%,then the quantity supplied of minivans will increase by about

Accepted Answer

A) 1.5% in the short run and 6% in the long run. 
B) 6% in the short run and 1.5% in the long run. 
C) 16.7% in the short run and 4.2% in the long run. 
D) 4.2% in the short run and 16.7% in the long run. 
A) 1.5% in the short run and 6% in the long run. 
B) 6% in the short run and 1.5% in the long run. 
C) 16.7% in the short run and 4.2% in the long run. 
D) 4.2% in the short run and 16.7% in the long run.

Question 9

If the price elasticity of supply is 1.5,and a price increase led to a 1.8% increase in quantity supplied,then the price increase is about

Accepted Answer

A) 0.67%. 
B) 0.83%. 
C) 1.20%. 
D) 2.70%. 
A) 0.67%. 
B) 0.83%. 
C) 1.20%. 
D) 2.70%.

Question 10

At a price of $1.00,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.20,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is about

Accepted Answer

A) 0.45 
B) 0.90 
C) 1.11 
D) 2.20 
A) 0.45 
B) 0.90 
C) 1.11 
D) 2.20

Question 11

A key determinant of the price elasticity of supply is

Accepted Answer

A) the ability of sellers to change the price of the good they produce. 
B) the ability of sellers to change the amount of the good they produce. 
C) how responsive buyers are to changes in sellers' prices. 
D) the slope of the demand curve. 
A) the ability of sellers to change the price of the good they produce. 
B) the ability of sellers to change the amount of the good they produce. 
C) how responsive buyers are to changes in sellers' prices. 
D) the slope of the demand curve.

Question 12

In January the price of widgets was $1.00,and Wendy's Widgets produced 80 widgets.In February the price of widgets was $1.50,and Wendy's Widgets produced 110 widgets.In March the price of widgets was $2.00,and Wendy's Widgets produced 140 widgets.The price elasticity of supply of Wendy's Widgets was about

Accepted Answer

A) 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. 
B) 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. 
C) 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. 
D) 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. 
A) 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. 
B) 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. 
C) 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. 
D) 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.

Question 13

A key determinant of the price elasticity of supply is the

Accepted Answer

A) number of close substitutes for the good in question. 
B) extent to which buyers alter their quantities demanded in response to changes in prices. 
C) length of the time period. 
D) extent to which buyers alter their quantities demanded in response to changes in their incomes. 
A) number of close substitutes for the good in question. 
B) extent to which buyers alter their quantities demanded in response to changes in prices. 
C) length of the time period. 
D) extent to which buyers alter their quantities demanded in response to changes in their incomes.

Question 14

The price elasticity of supply measures how responsive

Accepted Answer

A) sellers are to a change in price. 
B) sellers are to a change in buyers' income. 
C) buyers are to a change in production costs. 
D) equilibrium price is to a change in supply. 
A) sellers are to a change in price. 
B) sellers are to a change in buyers' income. 
C) buyers are to a change in production costs. 
D) equilibrium price is to a change in supply.

Question 15

Some firms eventually experience problems with their capacity to produce output as their output levels increase.For these firms,

Accepted Answer

A) market power is substantial. 
B) supply is perfectly inelastic. 
C) supply is more elastic at low levels of output and less elastic at high levels of output. 
D) supply is less elastic at low levels of output and more elastic at high levels of output. 
A) market power is substantial. 
B) supply is perfectly inelastic. 
C) supply is more elastic at low levels of output and less elastic at high levels of output. 
D) supply is less elastic at low levels of output and more elastic at high levels of output.

Question 16

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run.If an increase in the demand for cheese causes the price of cheese to increase by 15%,then the quantity supplied of cheese will increase by

Accepted Answer

A) 0.4% in the short run and 4.6% in the long run. 
B) 1.7% in the short run and 0.7% in the long run. 
C) 9% in the short run and 21% in the long run. 
D) 25% in the short run and 10.7% in the long run. 
A) 0.4% in the short run and 4.6% in the long run. 
B) 1.7% in the short run and 0.7% in the long run. 
C) 9% in the short run and 21% in the long run. 
D) 25% in the short run and 10.7% in the long run.

Question 17

If the price elasticity of supply for wheat is less than 1,then the supply of wheat is

Accepted Answer

A) inelastic. 
B) elastic. 
C) unit elastic. 
D) quite sensitive to changes in income. 
A) inelastic. 
B) elastic. 
C) unit elastic. 
D) quite sensitive to changes in income.

Question 18

When supply is perfectly elastic,the value of the price elasticity of supply is

Accepted Answer

A) 0. 
B) 1. 
C) greater than 0 and less than 1. 
D) infinity. 
A) 0. 
B) 1. 
C) greater than 0 and less than 1. 
D) infinity.

Question 19

In the long run,the quantity supplied of most goods

Accepted Answer

A) will increase in almost all cases,regardless of what happens to price. 
B) cannot respond at all to a change in price. 
C) can respond to a change in price,but the change is almost always inconsequential. 
D) can respond substantially to a change in price. 
A) will increase in almost all cases,regardless of what happens to price. 
B) cannot respond at all to a change in price. 
C) can respond to a change in price,but the change is almost always inconsequential. 
D) can respond substantially to a change in price.

Question 20

If the price elasticity of supply is 0.8,and price increased by 5%,quantity supplied would

Accepted Answer

A) increase by 4%. 
B) increase by 6.25%. 
C) decrease by 4%. 
D) decrease by 6.25%. 
A) increase by 4%. 
B) increase by 6.25%. 
C) decrease by 4%. 
D) decrease by 6.25%.

Exam 5: Elasticity and Its Applications: The Elasticity of Supply

Generally,a firm is more willing and able to increase quantity supplied in response to a price change when

Figure 5-18 -Refer to Figure 5-18.Using the midpoint method,what is the price elasticity of supply between $4 and $5?

A manufacturer produces 1,000 units,regardless of the market price.For this firm,the price elasticity of supply is

Figure 5-18 -Refer to Figure 5-18.Using the midpoint method,what is the price elasticity of supply between $5 and $6?

At price of $1.20,a local pencil manufacturer is willing to supply 150 boxes per day.At a price of $1.40,the manufacturer is willing to supply 170 boxes per day.Using the midpoint method,the price elasticity of supply is about

Figure 5-14 -Refer to Figure 5-14.Using the midpoint method,what is the price elasticity of supply between $16 and $40?

Suppose the price elasticity of supply for minivans is 0.3 in the short run and 1.2 in the long run.If an increase in the demand for minivans causes the price of minivans to increase by 5%,then the quantity supplied of minivans will increase by about

If the price elasticity of supply is 1.5,and a price increase led to a 1.8% increase in quantity supplied,then the price increase is about

At a price of $1.00,a local coffee shop is willing to supply 100 cinnamon rolls per day.At a price of $1.20,the coffee shop would be willing to supply 150 cinnamon rolls per day.Using the midpoint method,the price elasticity of supply is about

A key determinant of the price elasticity of supply is

A key determinant of the price elasticity of supply is the

The price elasticity of supply measures how responsive

Some firms eventually experience problems with their capacity to produce output as their output levels increase.For these firms,

Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run.If an increase in the demand for cheese causes the price of cheese to increase by 15%,then the quantity supplied of cheese will increase by

If the price elasticity of supply for wheat is less than 1,then the supply of wheat is

When supply is perfectly elastic,the value of the price elasticity of supply is

In the long run,the quantity supplied of most goods

If the price elasticity of supply is 0.8,and price increased by 5%,quantity supplied would

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income