Tag: supply - law of supply and price elasticity of supply

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Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

Unitary elasticity of supply means _________.

  1. ${ E } _{ s }>1$
  2. ${ E } _{ s }<1$
  3. ${ E } _{ s }=1$
  4. ${ E } _{ s }=0$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Unitary elasticity means that the percentage change in quantity supplied is exactly equal to the percentage change in price, resulting in an elasticity coefficient of 1.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

A horizontal supply curve parallel to the quantity axis (X-axis) implies that the elasticity of supply is _______.

  1. zero

  2. infinity

  3. equal to one

  4. greater than zero but less than infinity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A horizontal supply curve indicates that at a specific price, the quantity supplied can be infinite. This represents perfect elasticity, where elasticity is infinity.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

Relatively elastic supply means ________.

  1. ${ E } _{ s }>1$
  2. ${ E } _{ s }<1$
  3. ${ E } _{ s }=\infty$
  4. ${ E } _{ s }=0$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Relatively elastic supply occurs when the percentage change in quantity supplied is greater than the percentage change in price, meaning elasticity is greater than 1.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

Elasticity of supply is greater than one when _________.

  1. proportionate change in quantity supplied is more than the proportionate change in price.

  2. proportionate change in price is greater than the proportionate change in quantity supplied.

  3. change in price and quantity supplied are equal

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Elasticity of supply is greater than 1 when the quantity supplied is highly responsive to price changes, meaning the percentage change in quantity is greater than the percentage change in price.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

Perfectly elastic supply means _________.

  1. ${ E } _{ s }>1$
  2. ${ E } _{ s }<1$
  3. ${ E } _{ s }=\infty $
  4. ${ E } _{ s }=0$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Perfectly elastic supply is represented by a horizontal line where any change in price would lead to an infinite change in quantity, represented by infinity.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

The concept of consumer's surplus is useful in _______.

  1. distinguishing between Value-in-use and value-in-exchange.

  2. comparing the advantages of different places.

  3. useful in cost benefit analysis of projects.

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Consumer surplus is a versatile concept used in welfare economics to distinguish value-in-use from value-in-exchange, compare economic advantages, and perform cost-benefit analysis for public projects.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

When price of a commodity increase from Rs.10 to Rs.12 per unit, its supply goes up from 100 units to 140 units, the elasticity of supply would be ____.

  1. $1$
  2. $2$
  3. $3$
  4. $4$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Elasticity = (% change in Q) / (% change in P). % change in Q = (40/100) = 0.4. % change in P = (2/10) = 0.2. Elasticity = 0.4 / 0.2 = 2.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

If a fall in price of 'Y' result in a decrease in the sale of 'X', the two goods appear to be _____________.

  1. substitutes goods

  2. complementary goods

  3. inferior goods

  4. neutral goods
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

If a fall in the price of Y leads to a decrease in the sale of X, it means they are substitutes. Consumers switch from X to Y when Y becomes cheaper.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

When price of a commodity increase from Rs. 10 Rs. 12 per units, its supply goes up from 100 units to 140 units, the elasticity of supply would be _______.

  1. 1

  2. 2

  3. 3

  4. 4
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This is a duplicate of 485808. Elasticity = (% change in Q) / (% change in P). % change in Q = (40/100) = 0.4. % change in P = (2/10) = 0.2. Elasticity = 0.4 / 0.2 = 2.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

The supply curve which is beginning at the origin has.

  1. A price elasticity of supply less than one

  2. A price elasticity of supply equal to one

  3. A price elasticity of supply more than one

  4. A positive price elasticity of supply
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A linear supply curve that passes through the origin has a price elasticity of supply equal to 1 at every point along the curve.