Economics - Elasticity - PES Quiz

How do you calculate Price Elasticity of Supply?

• Percentage change in quantity supplied divided by percentage change in price

• Percentage change in demand divided by percentage change in price

• Total change in quantity supplied divided by total change in price

• Percentage change in quantity demanded divided by percentage change in price

Define Perfectly Inelastic Supply.

• Quantity supplied increases as price increases

• Quantity supplied remains constant regardless of changes in price.

• Quantity supplied decreases as price decreases

• Quantity supplied is not affected by changes in price

Explain Perfectly Elastic Supply.

• Perfectly Elastic Supply refers to a situation where the quantity supplied is infinitely responsive to the price, meaning that any change in price will result in an infinite change in quantity supplied.

• Perfectly Elastic Supply means the quantity supplied is not responsive to price changes

• Perfectly Elastic Supply means the quantity supplied is inversely related to price changes

• Perfectly Elastic Supply refers to a situation where the quantity supplied is only slightly responsive to price changes

What happens to Price Elasticity of Supply when there are no close substitutes for a good?

• Price Elasticity of Supply becomes elastic

• Price Elasticity of Supply becomes constant

• Price Elasticity of Supply becomes negative

• Price Elasticity of Supply becomes inelastic

How does time affect Price Elasticity of Supply?

• Time has no effect on Price Elasticity of Supply

• Time affects Price Elasticity of Supply by allowing producers to adjust their production levels in response to price changes. In the short run, supply may be inelastic as it takes time for producers to change their output levels. In the long run, supply becomes more elastic as producers have more time to adjust their production capacity.

• Price Elasticity of Supply increases as time passes

• Producers are not affected by time in adjusting their production levels

What role does production technology play in determining Price Elasticity of Supply?

• Production technology affects the ability of firms to respond to changes in price, thus influencing the Price Elasticity of Supply.

• Price Elasticity of Supply is determined solely by consumer demand

• Price Elasticity of Supply is only influenced by government regulations

• Production technology has no impact on Price Elasticity of Supply

Explain the concept of Inelastic Supply.

• Inelastic Supply refers to a situation where the quantity supplied is not very responsive to changes in price.

• Inelastic Supply means the quantity supplied is infinitely responsive to price changes

• Inelastic Supply means the quantity supplied is inversely related to price changes

• Inelastic Supply refers to a situation where the quantity supplied is only slightly responsive to price changes

How does the availability of raw materials impact Price Elasticity of Supply?

• The availability of raw materials has no impact on Price Elasticity of Supply

• The availability of raw materials affects the ability of firms to respond to changes in price, thus influencing the Price Elasticity of Supply.

• The availability of raw materials only affects the demand for the product

• The availability of raw materials increases the Price Elasticity of Supply

Explain the concept of Unitary Elastic Supply.

• Unitary Elastic Supply refers to a situation where the quantity supplied is infinitely responsive to the price, meaning that any change in price will result in an infinite change in quantity supplied.

• Unitary Elastic Supply means the quantity supplied is not responsive to price changes

• Unitary Elastic Supply means the quantity supplied is inversely related to price changes

• Unitary Elastic Supply refers to a situation where the quantity supplied changes in the same proportion as the change in price.

How does the availability of labor impact Price Elasticity of Supply?

• The availability of labor has no impact on Price Elasticity of Supply

• The availability of labor affects the ability of firms to respond to changes in price, thus influencing the Price Elasticity of Supply.

• The availability of labor only affects the demand for the product

• The availability of labor increases the Price Elasticity of Supply