Chapter 4 Elasticity: A Measure of Responsiveness

11) If the price elasticity of supply is elastic, which of the following could be a possible value of the elasticity?

A) 3

B) 1

C) 0.3

D) 0

12) If the price elasticity of supply is inelastic, which of the following could be a possible value of the elasticity?

A) 3

B) 1

C) 0.3

D) -0.3

13) If the percentage change in price is 2 and the percentage change in quantity supplied is 10, supply is

A) unaffected by price changes.

B) inelastic.

C) unitary elastic.

D) elastic.

14) If the percentage change in price is 20 and the percentage change in quantity supplied is 10, supply is

A) unaffected by price changes.

B) inelastic.

C) unitary elastic.

D) elastic.

15) If the percentage change in price is 10 and the percentage change in quantity supplied is 10, supply is

A) unaffected by price changes.

B) inelastic.

C) unitary elastic.

D) elastic.

Figure 4.3

16) In Figure 4.3 the most elastic supply curve

A) is.

B) is.

C) is.

D) Cannot be determined.

17) In Figure 4.3 the most inelastic supply curve

A) is.

B) is.

C) is.

D) Cannot be determined.

18) The supply curve for gasoline will be more elastic in

A) the short-run because of the principle of diminishing returns.

B) the long-run because of the principle of diminishing returns.

C) the short-run because firms have more time in which to respond to the price change.

D) the long-run because firms have more time in which to respond to the price change.

19) The quantity supplied of bagels is 100 at the unit price $1. Suppose the price elasticity of supply by the initial value method is 1.5, and you would like to induce sellers to increase the quantity of bagels supplied to 130. Then the new price for bagels must be

A) $11.

B) $10.20.

C) $1.20.

D) $1.10.

20) The quantity supplied of hot dogs is 200 at the unit price of $3.50. Suppose the price elasticity of supply by the initial value method is 2, and you would like to induce sellers to increase the quantity of hot dogs supplied to 220. Then new price must be

A) $1.5.

B) $2.

C) $2.5.

D) $3.