Suppose that the price elasticity of supply is 0.8 and the price increases by 10%. We would predict:
A. an 8% increase in quantity supplied.
B. a 12.5% increase in quantity supplied.
C. a 0.8% increase in quantity supplied.
D. a 1.25% increase in quantity supplied.
Answer: A
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The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food. When then central city, Mudhole, puts in an airstrip, the country is able to engage in trade
If the relative price of cloth in the outside world is 3 units of food, then Moribundia will export ________ and ________ factors used in the production of ________ will benefit. A) food; immobile; food B) food; mobile; food C) cloth; immobile; cloth D) cloth; mobile; cloth E) food; immobile; cloth
Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words, does this point lie on the contract curve?
What will be an ideal response?
Which of the following events best exemplifies the concept of signaling?
a. A college student's parents, having learned that their child is short of money, send her a check for $1,000. b. A new company making high quality bicycles at a reasonable price sends free bikes to reviewers working for bicycle magazines. c. A grocery store maintains a policy of examining the driver's license of everyone who writes a personal check to purchase his groceries. d. A university maintains a policy of considering for admission only those students who graduated among the top ten percent of their high school class.
Explain why crossing indifference curves would lead to a logical inconsistency
What will be an ideal response?