Tag: economics

Questions Related to economics

The supply of durable goods is usually _____________.
economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. more elastic

  2. less elastic

  3. perfectly elastic

  4. perfectly inelastic

Show answer
Correct Option: A
If ${E} _{s}=0.6$, and the percentage change in price $=5$, then percentage change in quantity supplied is ______.
economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. $8.33$

  2. $4.4$

  3. $5.6$

  4. $3$

Show answer
Correct Option: D
If 18% fall in price of the commodity causes 27% decrease in its supply, elasticity of supply will be _______.
economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. 1.5

  2. 0.5

  3. 0.67

  4. 2.5

Show answer
Correct Option: A

 Write True or False with a reason.
When a firm is using some rigid technology, its ${E} _{s}$ tends to be high.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. When a firm is using rigid technology ${E} _{s}$ tends to be low. Because, possibilities of variation in output are reduced.

 Write True or False with a reason.
If a straight line upward sloping supply curve shoots from the X-axis, elasticity of supply $>1$.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. When a straight line upward sloping supply curve shoots from the X-axis, elasticity of supply $({E} _{s})< 1$

Write True or False with a reason.
In the long period, elasticity of supply tends to be lower than in the short period.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. Longer the time period, greater will be the elasticity of supply. Because, over a long period of time, more and more factors are easily available and their input can be changed to increase (or decrease) output of the commodity.

 Write True or False with a reason.
If elasticity of supply $=0$, supply curve becomes a horizontal straight line.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. If elasticity of supply $=0$, supply curve becomes a vertical straight line parallel to Y-axis.

 Write True or False with a reason.
If a straight line upward sloping supply curve shoots from the Y-axis, elasticity of supply $< 1$.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

False. When a straight line upward sloping supply curve shoots from the Y-axis, elasticity of supply $({E} _{s}>1)$

Write True or False with a reason.
${E} _{s}=1$ only if supply curve forms a $\angle {45}^{o}$ at the origin. Is it true?

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: B

Write True or False with a reason.
If a straight line upward sloping supply curve shoots from the origin, elasticity of supply is always equal to one.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

True. When a straight line upward sloping supply curve passes through the origin (no matter what the angle it forms), the elasticity of supply is equal to one.