List factors that increase the price elasticity of supply
What will be an ideal response?
Factors that increase the price elasticity of supply are:
• The good has a constant or very gently rising opportunity cost of production.
• More time has passed since the price of the good changed.
• The good can be stored.
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A tax that is imposed at each stage of production is a
a. sales tax b. excise tax c. high-incidence tax d. value-added tax e. none of the above
In the simple Keynesian model, if the tax function is given by T = 0.15Y and the consumption function is C = 50 + 0.7YD then a 10-unit increase in government spending would increase equilibrium income by
a. 10 units. b. 11.2 units. c. 22.4 units. d. 30 units. e. none of the above
What is the primary function of a bank? Why do people prefer banks over other financial intermediaries?
An increase in expected future output while holding today's output constant would
A. increase today's desired consumption and decrease desired national saving. B. decrease today's desired consumption and increase desired national saving. C. decrease today's desired consumption and decrease desired national saving. D. increase today's desired consumption and increase desired national saving.