Goods & Services Analysis

What are the different types of goods?

• Consumer goods, Capital goods, Intermediate goods, Public goods

• Service goods

• Virtual goods

• Luxury goods

How does an increase in production costs affect the supply curve?

• The supply curve becomes steeper.

• The supply curve shifts to the right.

• The supply curve shifts to the left.

• The supply curve becomes vertical.

What is price elasticity of demand?

• Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.

• Price elasticity of demand is the same as price elasticity of supply.

• Price elasticity of demand is not affected by consumer preferences.

• Price elasticity of demand is only applicable to luxury goods.

Explain the concept of perfectly elastic demand.

• Perfectly elastic demand means that any increase in price will result in quantity demanded dropping to zero.

• Perfectly elastic demand means that quantity demanded remains constant regardless of price changes.

• Perfectly elastic demand is a rare occurrence in real-world markets.

• Perfectly elastic demand is the same as perfectly inelastic demand.

How does the availability of substitutes affect price elasticity?

• Availability of substitutes makes demand more elastic.

• Availability of substitutes makes demand less elastic.

• Availability of substitutes has no impact on price elasticity.

• Availability of substitutes only affects supply, not demand.

How does income elasticity of demand vary for luxury goods compared to essential goods?

• Income elasticity of demand is higher for luxury goods.

• Income elasticity of demand is higher for essential goods.

• Income elasticity of demand is the same for both luxury and essential goods.

• Income elasticity of demand does not apply to luxury goods.

Explain the concept of income elasticity of supply.

• Income elasticity of supply measures the responsiveness of quantity supplied to a change in consumer income.

• Income elasticity of supply is the same as price elasticity of supply.

• Income elasticity of supply is not affected by changes in consumer income.

• Income elasticity of supply is only applicable to services, not goods.

How does income elasticity impact the demand for inferior goods?

• Income elasticity makes the demand for inferior goods more elastic.

• Income elasticity makes the demand for inferior goods less elastic.

• Income elasticity has no impact on the demand for inferior goods.

• Income elasticity only affects the demand for luxury goods.

What is the relationship between price elasticity of supply and the responsiveness of quantity supplied to a change in price?

• Price elasticity of supply measures the responsiveness of quantity supplied to a change in price.

• Price elasticity of supply is not affected by changes in price.

• Price elasticity of supply only applies to luxury goods.

• Price elasticity of supply is the same as income elasticity of supply.

How does the time horizon impact the price elasticity of supply?

• Shorter time horizons generally result in less elastic supply.

• Longer time horizons generally result in more elastic supply.

• Time horizon has no impact on price elasticity of supply.

• Time horizon only affects price elasticity of demand.