Ch. 5 Lesson 4: What is Elasticity of Supply ?

Elasticity of supply measures how responsive

• consumers are to price change

• government is to price change

• producers are to price change

• workers are to price change

What is the most common reason for supply to be inelastic?

• the difficulty of changing the amount produced

• the lack of competition among producers

• the amount of government regulation

• the lack of demand among consumers

Which of the following is most likely to have elasticity of supply for their product?

• apple grower

• car manufacturer

• electronics manufacturer

• wedding-cake baker

What do both elasticity of demand and elasticity of supply measure?

• responsiveness to price

• responsiveness to quantity

• desires of consumers

• desires of producers

Consumers can benefit from an inelastic supply in which of the following ways?

• Prices remain stable or essential goods are always available despite changes in demand.

• Prices fluctuate rapidly with changes in demand.

• Goods become scarce during high demand periods.

• Consumers have more substitutes to choose from.

Consumers can be hurt from an inelastic supply when:

• prices rise sharply due to increased demand and supply cannot increase to meet it

• prices fall due to excess supply

• demand decreases and supply increases

• supply becomes perfectly elastic