Tag: economics

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Questions Related to economics

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.

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

Supply is likely to be more price elastic ________,

  1. in the short run rather than the long run

  2. if factors of production are relatively immobile between industries

  3. if there are very few producers

  4. if it is easy to expand output
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Supply is more elastic when producers can easily adjust their output in response to price changes. If it is easy to expand output, the producer has more flexibility.

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

Percent increase in the price of sugar reduces sugar consumption by about 5 percent. The increase causes households to _____________.

  1. spend more on sugar

  2. spend less on sugar

  3. spend the same amount on sugar

  4. consume more goods like coffee and tea that are complements of sugar
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

If a price increase (e.g., 10%) reduces consumption by a smaller percentage (5%), the demand is inelastic. Total expenditure (Price * Quantity) will increase because the price effect outweighs the quantity effect.

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

Which one of the following labour resources will likely have the most inelastic supply schedule in the short run?

  1. Filling station attendants

  2. Sales clerks

  3. Construction labourers

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

Supply of labour is inelastic when it requires long periods of specialized training or education. A dentist requires many years of education, making the supply of dentists very inelastic in the short run compared to unskilled labour.

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 the greater the elasticity of supply, the change in the new equilibrium price will _____________.

  1. be higher

  2. be higher than previous price

  3. be lower

  4. be lower than previous price
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When supply is highly elastic, a change in demand results in a smaller change in price because the quantity supplied adjusts significantly to absorb the shock.

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 _________ refers to the amount of a certain good producers are willing to supply when receiving a certain price.

  1. quantity demanded

  2. quantity purchased

  3. quantity supplied

  4. quantity sold
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Quantity supplied is defined as the specific amount of a good that producers are willing and able to sell at a specific price during a given period.

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

Usually, the demand for commodities, the consumption of which can be postponed, has an _________ demand as the prices rise and expected to fall again.

  1. elastic

  2. inelastic

  3. unitary

  4. All of above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

If consumption can be postponed, consumers are more sensitive to price changes (they will wait for prices to fall), making the demand elastic.