What are the determinants of elasticity of supply?
The following factors determine the price elasticity of supply for a good:
a . Availability of close substitutes: The more substitutes that exist in a production process, the easier it will be for sellers to switch between products given changes in prices. As more close substitutes become available, the supply becomes more elastic. If fewer close substitutes exist, the supply is less elastic.
b. The time period of analysis: The longer the time frame of analysis, the easier it is to make adjustments in production by switching production methods and/or building or closing down production facilities. Shorter time frames generally result in less elastic supply. Longer time frames generally result in more elastic supply.
c. Competition in the market: The fewer firms that exist in a market, the less responsive firms are to price changes.
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A disadvantage of options as instruments of performance-related rewards is:
a. that it exposes the executives to market volatility. b. that it increases opportunistic behavior on the part of the employees who expect to earn these incentives. c. that the actual monetary gains from such incentives are usually lower than other performance-related incentives provided by organizations. d. that once an option has been exercised and the executive has sold her shares it will have no continuing effect on her incentives to make better future decisions.
Each district bank of the Fed comprises of nine board of directors of which three are appointed by the:
a. Federal Reserve System member banks. b. President. c. Attorney General. d. Board of Governors of the Fed. e. Congress.
When oligopolistic firms collude to maximize their joint profits, in comparison with the situation in competitive markets, their actions generally lead to
a. a larger output and lower prices. b. a smaller output and higher prices. c. a smaller output and lower prices. d. the same output and higher prices.
At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $222,000 and Total Liabilities of $17,100 and Total Paid-in capital of $68,400. During the year, the company reported total revenues of $259,000 and expenses of $200,500. Also, dividends during the year totaled $54,000. Assuming no other changes to Retained earnings, the balance in the Retained earnings account at the end of the year would be: