Suppose an increase in the price of hamburger from $3 to $4 leads to an increase in quantity supplied from 100 units to 150 units. At the original price, the price elasticity of supply for hamburgers is ________ so supply is ________.
A. 3/2; inelastic
B. 2/3; elastic
C. 2/3; inelastic
D. 3/2; elastic
Answer: D
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Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the monetary base?
A) $45 million B) $450 million C) $4.5 million D) The bond issuance would not impact the monetary base only the money stock.
The following is NOT an example of a potential monitoring solution to moral hazard
a. a pre-hire typing test for clerical employees b. closed circuit TVs throughout a warehouse c. GPS tracking devices in repair trucks d. listening in on call center conversations
An insurance company offering a high-deductible plan is an example of:
A. screening. B. signaling. C. building a reputation. D. statistical discrimination.
Which of the following is an example of the life-cycle motive for saving?
A. Jordan sets aside $200 per month in case she has to pay for a new roof for her house. B. Chris keeps $15,000 in a money market account to pay expenses in case he loses his job. C. Pat puts $400 per month in his 401(k) retirement account. D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when they die.