Pearson ch 4 Elasticities review 10

You are on a committee that is considering ways to raise money for your House's fundraiser. You would recommend increasing the price of raffle tickets only if you thought the demand curve for these tickets was realistically

• Inelastic

• Elastic

• Perfectly Elastic

The elasticity of supply measures the responsiveness of

• quantity supplied to changes in price.

• quantity demanded to changes in supply.

• quantity supplied to changes in demand.

The above figure illustrates the demand curve for a good. The good has

• many substitutes.

• only one substitute.

• no substitutes.

Elasticity is another word for ________________.

• Rigidity.

• Seasonal change.

• Responsiveness.

what factor has the greatest influence on elasticity/ inelasticity of supply?

• profit

• time

• price

When is the price elasticity of demand for a good likely to be high? (higher the number the more elastic )

• When expenditure on the good is a small part of total expenditure

• When there are many substitutes for the good

• When the good is habit-forming

What simple method measures demand elasticity?

• Inverse Demand Theory

• Total Revenue method

• Equilibrium Price Test

This curve shows

• Elastic Demand
• Inelastic Demand

Determinants of supply include: there is more than one answer

• length of time

• income levels

• spare capacity

• mobility of factors of production

• advertising

The quantity of peanuts supplied increased from 40 tons/week 50% increase to 60 tons/week when the price of peanuts increased from $4/ton to $5/ton. 20% The price elasticity of supply for peanuts over this price range is:

• Elastic

• Inelastic

• Unit Elastic

• Perfectly Inelastic