Tag: supply - law of supply and price elasticity of supply

Questions Related to supply - law of supply and price elasticity of supply

Supply is likely to be more price elastic ________,

  1. in the short run rather than the long run

  2. if factors of production are relatively immobile between industries

  3. if there are very few producers

  4. if it is easy to expand output


Correct Option: D

Percent increase in the price of sugar reduces sugar consumption by about 5 percent. The increase causes households to _____________.

  1. spend more on sugar

  2. spend less on sugar

  3. spend the same amount on sugar

  4. consume more goods like coffee and tea that are complements of sugar


Correct Option: A

Which one of the following labour resources will likely have the most inelastic supply schedule in the short run?

  1. Filling station attendants

  2. Sales clerks

  3. Construction labourers

  4. Dentist


Correct Option: D

 When the greater the elasticity of supply, the change in the new equilibrium price will _____________.

  1. be higher

  2. be higher than previous price

  3. be lower

  4. be lower than previous price


Correct Option: C

The _________ refers to the amount of a certain good producers are willing to supply when receiving a certain price.

  1. quantity demanded

  2. quantity purchased

  3. quantity supplied

  4. quantity sold


Correct Option: C

Usually, the demand for commodities, the consumption of which can be postponed, has an _________ demand as the prices rise and expected to fall again.

  1. elastic

  2. inelastic

  3. unitary

  4. All of above


Correct Option: A

The supply is said to be __________, when any change in price produces no change in the quantity supplied of a commodity.

  1. relatively more elastic

  2. perfectly elastic

  3. perfectly inelastic

  4. relatively Inelastic


Correct Option: C

The supply is ___________, when a small change in price causes a greater change in quantity supplied.

  1. relatively more elastic

  2. perfectly elastic

  3. perfectly inelastic

  4. relatively Inelastic


Correct Option: A

The formula for calculating price elasticity of supply is ________________.

  1. $\displaystyle E _s = \frac{percentage \,\, change \,\, in \,\, price}{percentage \,\, change\,\, in \,\, quantity\,\, demanded}$

  2. $\displaystyle E _s = \frac{percentage \,\, change \,\, in \,\, quantity\,\, demanded }{percentage \,\, change\,\, in \,\, quantity\,\, supplied}$

  3. $\displaystyle E _s = \frac{percentage \,\, change\,\, in \,\, quantity\,\, supplied }{percentage \,\, change\,\, in \,\, price}$

  4. $\displaystyle E _s = \frac{ percentage \,\, change \,\, in \,\, quantity \,\, demanded }{percentage \,\, change\,\, in \,\, price}$


Correct Option: C

The supply is said to be ____________, when a very insignificant change in price leads to an infinite change in quantity supplied.

  1. relatively more elastic

  2. perfectly elastic

  3. perfectly inelastic

  4. relatively Inelastic


Correct Option: B