Suppose the price of a product increases from €50 to €70 and the quantity supplied rises from 40 a day to 80. What is the Price Elasticity of Supply?
a) 0.5.
b) -0.5.
c) 2.5.
d) -2.5.
Answer: c) 2.5.
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Refer to Figure 5-1. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, the diagram shows
A) the effect of an external cost imposed on a producer. B) the effect of a positive externality in the production of a good. C) the effect of a negative externality in the production of a good. D) the effect of an external benefit such as a subsidy granted to consumers of a good.
Consider a policy proposal that aims to save small dairy farms by providing an annual lump sum subsidy to dairy farms with fewer than two hundred dairy cows
Why might this proposal pass, even if it benefits a few dairy farmers at the expense of the majority of voters? a. The program might only cost each voter a few pennies and yet benefit small dairy farmers immensely. b. The American people value the small dairy farm highly and want to see it preserved. c. A cyclical majority makes it possible for the proposal to pass although it is not generally preferred. d. Voters think it will result in cheap milk.
Of the following demographic groups, which has the lowest poverty rate in the U.S.?
a. Families headed by a female with no adult male present. b. Families in which the "head of the household" has not attained a high-school education. c. Families headed by a male with no adult female present. d. Families in which the "head of the household" has attained at least a bachelor's degree from a college or university.
A firm will continue to produce if total revenue is greater than total variable cost even if total revenue is less than fixed cost
a. True b. False