Question 1

If the quantity supplied is the same regardless of price,then supply is

Accepted Answer

A) elastic. 
B) perfectly elastic. 
C) perfectly inelastic. 
D) inelastic. 
A) elastic. 
B) perfectly elastic. 
C) perfectly inelastic. 
D) inelastic.

Question 2

The price elasticity of supply measures how much

Accepted Answer

A) the quantity supplied responds to changes in input prices. 
B) the quantity supplied responds to changes in the price of the good. 
C) the price of the good responds to changes in supply. 
D) sellers respond to changes in technology. 
A) the quantity supplied responds to changes in input prices. 
B) the quantity supplied responds to changes in the price of the good. 
C) the price of the good responds to changes in supply. 
D) sellers respond to changes in technology.

Question 3

Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run.If an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%,then the quantity supplied of soccer balls will increase by about

Accepted Answer

A) 0.67% in the short run and 0.17% in the long run. 
B) 3% in the short run and 1.2% in the long run. 
C) 6% in the short run and 24% in the long run. 
D) 66.7% in the short run and 16.7% in the long run. 
A) 0.67% in the short run and 0.17% in the long run. 
B) 3% in the short run and 1.2% in the long run. 
C) 6% in the short run and 24% in the long run. 
D) 66.7% in the short run and 16.7% in the long run.

Question 4

Suppose that two supply curves pass through the same point.One is steep,and the other is flat.Which of the following statements is correct?

Accepted Answer

A) The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve. 
B) The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve. 
C) Given two prices with which to calculate the price elasticity of supply,that elasticity would be the same for both curves. 
D) A decrease in demand will increase total revenue if the steeper supply curve is relevant,while a decrease in demand will decrease total revenue if the flatter supply cure is relevant. 
A) The flatter supply curve represents a supply that is inelastic relative to the supply represented by the steeper supply curve. 
B) The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve. 
C) Given two prices with which to calculate the price elasticity of supply,that elasticity would be the same for both curves. 
D) A decrease in demand will increase total revenue if the steeper supply curve is relevant,while a decrease in demand will decrease total revenue if the flatter supply cure is relevant.

Question 5

Figure 5-15  
-Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between points B and C?

Accepted Answer

A) 1.67 
B) 1.19 
C) 0.84 
D) 0.61 
A) 1.67 
B) 1.19 
C) 0.84 
D) 0.61

Question 6

If the price elasticity of supply for a good is equal to infinity,then the

Accepted Answer

A) supply curve is vertical. 
B) supply curve is horizontal. 
C) supply curve also has a slope equal to infinity. 
D) quantity supplied is constant regardless of the price. 
A) supply curve is vertical. 
B) supply curve is horizontal. 
C) supply curve also has a slope equal to infinity. 
D) quantity supplied is constant regardless of the price.

Question 7

Figure 5-14  
-Refer to Figure 5-14.Over which range is the supply curve in this figure the least elastic?

Accepted Answer

A) $16 to $40 
B) $40 to $100 
C) $100 to $220 
D) $220 to $430 
A) $16 to $40 
B) $40 to $100 
C) $100 to $220 
D) $220 to $430

Question 8

The price elasticity of supply along a typical supply curve is

Accepted Answer

A) constant. 
B) equal to zero. 
C) higher at low levels of quantity supplied and lower at high levels of quantity supplied. 
D) lower at low levels of quantity supplied and higher at high levels of quantity supplied. 
A) constant. 
B) equal to zero. 
C) higher at low levels of quantity supplied and lower at high levels of quantity supplied. 
D) lower at low levels of quantity supplied and higher at high levels of quantity supplied.

Question 9

Figure 5-15  
-Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between points C and D?

Accepted Answer

A) 0.21 
B) 0.29 
C) 0.73 
D) 1.36 
A) 0.21 
B) 0.29 
C) 0.73 
D) 1.36

Question 10

A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per unit.Using the midpoint method,for this range of prices,the price elasticity of supply is about

Accepted Answer

A) 0.45. 
B) 2.0. 
C) 2.2. 
D) 200. 
A) 0.45. 
B) 2.0. 
C) 2.2. 
D) 200.

Question 11

At price of $1.30 per pound,a local apple orchard is willing to supply 150 pounds of apples per day.At a price of $1.50 per pound,the orchard is willing to supply 170 pounds of apples per day.Using the midpoint method,the price elasticity of supply is about

Accepted Answer

A) 1.14. 
B) 1.00. 
C) 0.875. 
D) 0.50. 
A) 1.14. 
B) 1.00. 
C) 0.875. 
D) 0.50.

Question 12

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each.At a price of $0.80,the bakery would be willing to supply 1,100 bagels.Using the midpoint method,the price elasticity of supply for bagels is about

Accepted Answer

A) 0.62. 
B) 0.77. 
C) 1.24. 
D) 1.63. 
A) 0.62. 
B) 0.77. 
C) 1.24. 
D) 1.63.

Question 13

If a 20% change in price results in a 15% change in quantity supplied,then the price elasticity of supply is about

Accepted Answer

A) 1.33,and supply is elastic. 
B) 1.33,and supply is inelastic. 
C) 0.75,and supply is elastic. 
D) 0.75,and supply is inelastic. 
A) 1.33,and supply is elastic. 
B) 1.33,and supply is inelastic. 
C) 0.75,and supply is elastic. 
D) 0.75,and supply is inelastic.

Question 14

If the price elasticity of supply is 0.4,and a price increase led to a 5% increase in quantity supplied,then the price increase is about

Accepted Answer

A) 0.25%. 
B) 1.2%. 
C) 2%. 
D) 12.5%. 
A) 0.25%. 
B) 1.2%. 
C) 2%. 
D) 12.5%.

Question 15

Which of the following statements is valid when the market supply curve is vertical?

Accepted Answer

A) Market quantity supplied does not change when the price changes. 
B) Supply is perfectly elastic. 
C) An increase in market demand will increase the equilibrium quantity. 
D) An increase in market demand will not increase the equilibrium price. 
A) Market quantity supplied does not change when the price changes. 
B) Supply is perfectly elastic. 
C) An increase in market demand will increase the equilibrium quantity. 
D) An increase in market demand will not increase the equilibrium price.

Question 16

Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity of melons that melon farmers produce from 1.2 million pounds to 1.6 million pounds.Using the midpoint method,what is the approximate value of the price elasticity of supply?

Accepted Answer

A) 0.67 
B) 0.89 
C) 1.00 
D) 1.13 
A) 0.67 
B) 0.89 
C) 1.00 
D) 1.13

Question 17

If a 25% change in price results in a 40% change in quantity supplied,then the price elasticity of supply is about

Accepted Answer

A) 0.63,and supply is elastic. 
B) 0.63,and supply is inelastic. 
C) 1.60,and supply is elastic. 
D) 1.60,and supply is inelastic. 
A) 0.63,and supply is elastic. 
B) 0.63,and supply is inelastic. 
C) 1.60,and supply is elastic. 
D) 1.60,and supply is inelastic.

Question 18

When a supply curve is relatively flat,

Accepted Answer

A) sellers are not very responsive to changes in price. 
B) supply is relatively inelastic. 
C) supply is relatively elastic. 
D) Both a and b are correct. 
A) sellers are not very responsive to changes in price. 
B) supply is relatively inelastic. 
C) supply is relatively elastic. 
D) Both a and b are correct.

Question 19

If the price elasticity of supply is 1.2,and a price increase led to a 5% increase in quantity supplied,then the price increase is about

Accepted Answer

A) 0.24%. 
B) 4.2%. 
C) 6%. 
D) 6.2%. 
A) 0.24%. 
B) 4.2%. 
C) 6%. 
D) 6.2%.

Question 20

Which of the following statements is not valid when supply is perfectly elastic?

Accepted Answer

A) The elasticity of supply approaches infinity. 
B) The supply curve is horizontal. 
C) Very small changes in price lead to very large changes in quantity supplied. 
D) The time period under consideration is more likely a short period rather than a long period. 
A) The elasticity of supply approaches infinity. 
B) The supply curve is horizontal. 
C) Very small changes in price lead to very large changes in quantity supplied. 
D) The time period under consideration is more likely a short period rather than a long period.

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

If the quantity supplied is the same regardless of price,then supply is

The price elasticity of supply measures how much

Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run.If an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%,then the quantity supplied of soccer balls will increase by about

Suppose that two supply curves pass through the same point.One is steep,and the other is flat.Which of the following statements is correct?

Figure 5-15 -Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between points B and C?

If the price elasticity of supply for a good is equal to infinity,then the

Figure 5-14 -Refer to Figure 5-14.Over which range is the supply curve in this figure the least elastic?

The price elasticity of supply along a typical supply curve is

Figure 5-15 -Refer to Figure 5-15.Using the midpoint method,what is the price elasticity of supply between points C and D?

A manufacturer produces 400 units when the market price is $10 per unit and produces 600 units when the market price is $12 per unit.Using the midpoint method,for this range of prices,the price elasticity of supply is about

At price of $1.30 per pound,a local apple orchard is willing to supply 150 pounds of apples per day.At a price of $1.50 per pound,the orchard is willing to supply 170 pounds of apples per day.Using the midpoint method,the price elasticity of supply is about

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each.At a price of $0.80,the bakery would be willing to supply 1,100 bagels.Using the midpoint method,the price elasticity of supply for bagels is about

If a 20% change in price results in a 15% change in quantity supplied,then the price elasticity of supply is about

If the price elasticity of supply is 0.4,and a price increase led to a 5% increase in quantity supplied,then the price increase is about

Which of the following statements is valid when the market supply curve is vertical?

Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity of melons that melon farmers produce from 1.2 million pounds to 1.6 million pounds.Using the midpoint method,what is the approximate value of the price elasticity of supply?

If a 25% change in price results in a 40% change in quantity supplied,then the price elasticity of supply is about

When a supply curve is relatively flat,

If the price elasticity of supply is 1.2,and a price increase led to a 5% increase in quantity supplied,then the price increase is about

Which of the following statements is not valid when supply is perfectly elastic?

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