Quiz on Price Elasticity of Supply

What does a PES value of 2 indicate?

• The supply is unitary elastic

• The supply is perfectly inelastic

• The supply is elastic

• The supply is inelastic

What happens to PES if total costs rise significantly as output increases?

• PES becomes relatively inelastic

• PES remains unchanged

• PES becomes perfectly elastic

• PES becomes more elastic

How does unused capacity affect the elasticity of supply?

• It makes supply more inelastic

• It has no effect on supply elasticity

• It allows for easier output increases, making supply more elastic

• It decreases the quantity supplied

What is the effect of the mobility of factors of production on PES?

• It makes PES perfectly inelastic

• It makes PES more elastic

• It has no effect on PES

• It makes PES inelastic

In which time period is PES generally the most inelastic?

• All time periods are equally elastic

• Immediate time period

• Short run

• Long run

What happens to PES in the long run?

• PES becomes more inelastic

• PES remains unchanged

• PES becomes much more elastic

• PES becomes perfectly inelastic

How does the ability to store stock affect PES?

• It decreases the quantity supplied

• It allows for swift supply increases, making PES more elastic

• It has no effect on PES

• It makes PES more inelastic

What is a characteristic of a product with a PES value of 0.5?

• The supply is elastic

• The supply is inelastic

• The supply is perfectly elastic

• The supply is unitary elastic

What factor can prevent a significant rise in costs when increasing supply?

• High demand for the product

• Existence of unused capacity

• Low production costs

• High competition in the market

What is the relationship between time period and PES?

• Longer time periods generally lead to more inelastic PES

• Shorter time periods generally lead to more elastic PES

• Longer time periods generally lead to more elastic PES

• Time period has no effect on PES