The short-run elasticity of supply is less than the long-run elasticity of supply A) because consumers’ tastes and preferences change in the long run but not in the short run. B) because producers can adjust the amount of machinery in the long run but not in the short run. C) only for durable goods. D) […]
Date: September 9th, 2020
As more people quit smoking in the United States, what is expected to happen to the price elasticity of supply of cigarettes? A) It will decrease. B) It will increase. C) It can increase or decrease. D) It will not change. ANSWER A
Date: September 9th, 2020
Consider Sam and Linda both drive a relatively inefficient sport utility vehicle (SUV). Sam has a lease that doesn’t expire for three years whereas Linda owns her sport utility vehicle free and clear. If the price of gasoline was to increase by fifty percent, which of these statements is most likely TRUE? A) Linda will […]
Date: September 9th, 2020
The short-run price elasticity of demand for refrigerators is relatively inelastic. Indicate whether the statement is true or false ANSWER False. People can put off buying a refrigerator in the short run. Therefore demand is elastic in the short run.
Date: September 9th, 2020
In the mid-1980s, the salaries of accounting professors with Ph.D.s increased dramatically. This resulted in an increase in enrollments in Ph.D. accounting programs. Since a Ph.D. degree in accounting may take at least four years to complete, the short-run elasticity of supply of accounting professors is A) greater than the long-run-elasticity of supply. B) less […]
Date: September 9th, 2020
Suppliers with a high supply elasticity will bear a ________ tax incidence, while suppliers with a low supply elasticity will bear a ________ tax incidence. A) lower; higher B) higher; lower C) lower or no; higher or full D) A and C ANSWER D
Date: September 9th, 2020
The duration of the “short-run” A) is one year. B) is the same for all goods. C) depends on the relative short-run elasticity of demand and supply for the good. D) depends on how long it takes consumers or firms to adjust for a particular good. ANSWER D
Date: September 9th, 2020
In the elastic portion of the supply, small changes in prices lead to ________ changes in quantity, while in the inelastic portion of the supply curve, small changes in prices lead to ________ changes in quantity. A) small; small B) large; large C) small; large D) large; small ANSWER D
Date: September 9th, 2020
Why is the supply of oil more price elastic in the long run? A) New deposits are found. B) Better extraction technology is developed. C) Firms have the ability to change the amount of all inputs. D) All of the above. ANSWER D
Date: September 9th, 2020
The elasticity of supply of rental units in New York City is estimated to be about 0.10. Current price restrictions (price floors) are estimated to decrease the price of rental units by 10% below equilibrium price. By how much would price and quantity supplied change if the price floors were removed from the rental unit […]
Date: September 9th, 2020
