If a linear supply curve has a zero intercept, the elasticity of supply is always unitary. Indicate whether the statement is true or false ANSWER True . A linear supply curve from the origin takes the form Q = ap. Elasticity equals a ∗ p/Q. Substituting for Q yields a ∗ p/ap. Numerator and […]
Date: September 9th, 2020
As the demand for corn increases to provide input for ethanol production, what is expected to happen to the price elasticity of corn supply? A) It will decrease. B) It will become zero. C) It will increase. D) It will not change. ANSWER A
Date: September 9th, 2020
The rising price of oil has made it feasible to extract oil out of oily sand in Canada. Concerning the oil market this is an example of A) a higher price elasticity of supply in the long run. B) a higher price elasticity of supply in the short run. C) a higher price elasticity of […]
Date: September 9th, 2020
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
