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
For all goods, the long run demand curve is always more elastic than the short run demand curve. Indicate whether the statement is true or false ANSWER False. Goods that can be easily stored may have a more elastic short run demand curve than long run.
Date: September 9th, 2020
Relative to the short-run demand for gasoline, the long-run demand for gasoline is A) probably more elastic since people need time to change automobiles and driving habits. B) probably less elastic since people need time to change automobiles and driving habits. C) probably more elastic because people can hoard this good. D) probably less elastic […]
Date: September 9th, 2020
Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s. Why might they say this? A) They own stock in oil companies. B) They anticipate that the longer the price is high, the more elastic the response by consumers will be. C) […]
Date: September 9th, 2020
Electricity accounts for almost 20% of the cost of making steel. A 10% increase in electricity prices results in steel firms decreasing production and thereby demanding 5% less electricity. Over many years, technological innovations can change the way steel firms make steel and reduce the industry’s energy requirements. This suggests that the steel industry’s short-run […]
Date: September 9th, 2020
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
