Tag: economics

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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

Very short period is the market condition where the supply remain perfectly____.

  1. elastic

  2. inelastic

  3. unity elastic
  4. elasticity is less than $1$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This appears to be a duplicate or near-duplicate of question 485797. In the very short period or market period, supply remains perfectly inelastic because producers have no time to adjust production. The goods available for sale are fixed, and new production cannot occur instantaneously regardless of price changes.

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 dealer of air-conditioners is prepared to supply 1000 pieces of AC if the price is Rs. 20,000 per piece however he is prepared to supply 1200 pieces if the price is Rs. 24,000 per piece. What is the price elasticity of supply of AC?

  1. 0.5

  2. 1

  3. 0.75

  4. 1.25
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Elasticity = (% change in Q) / (% change in P). % change in Q = (200/1000) = 0.2. % change in P = (4000/20000) = 0.2. Elasticity = 0.2 / 0.2 = 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

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.