What does the elasticity of supply measure? How is it calculated?
What will be an ideal response?
The elasticity of supply measures the response of quantity supplied to a change in price. It is calculated by dividing the percentage change in quantity supplied by the percentage change in price.
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Refer to Figure 4.8. If half of your friends go to the beach and half go to the park, and you decide to go to the park, then
A) your friends at the beach will switch to the park. B) you and your friends at the park will switch to the beach. C) your friends at the beach will switch to the park and your friends at the park will switch to the beach. D) your friends will all stay where they are.
When the exchange rate moves from $1 = CAD1.5 to $1 = CAD1.66, it implies:
a. the U.S. dollar has depreciated in relation to the Canadian dollar. b. U.S. imports of Canadian goods will rise. c. the dollar price of the Canadian dollar has risen. d. the Canadian dollar has appreciated in relation to the U.S. dollar. e. Canadian imports of U.S. goods will rise.
Dividing the number seventy-two by an interest rate yields
A. the number of years it would take an investment to double in value. B. the annual payment required to pay off a loan at that interest rate. C. a good measure of the level of risk in the investment proposal. D. all of these options are correct.
The idea of charging two different groups of consumers two different prices is practiced in:
A. two-part pricing. B. price discrimination. C. price matching. D. None of the statements is correct.