Price Elasticity of Supply Quiz

Which of the following best describes what price elasticity of supply measures?

• The responsiveness of quantity supplied to a change in price

• The responsiveness of demand to a change in price

• The total cost of production

• The amount of goods produced regardless of price

Which factors influence the price elasticity of supply according to the provided material?

• Difficulty, expense, and time involved in increasing production

• Consumer preferences and advertising

• Government regulations and taxes

• The number of suppliers in the market

Suppose a product’s supply is highly responsive to price changes. Based on the concept of price elasticity of supply, what can you infer about the production process?

• It is likely easy, inexpensive, and quick to increase production

• It is likely difficult, expensive, and slow to increase production

• The product is always in high demand

• The product is produced by only one supplier

Which of the following best describes the concept of "elasticity of supply"?

• It measures how much quantity supplied responds to a change in price.

• It measures how much price changes in response to quantity supplied.

• It measures the total revenue generated from supply.

• It measures the cost of production for suppliers.

Given the formula for elasticity of supply, what is the correct way to calculate it?

• % change in price divided by % change in quantity supplied

• % change in quantity supplied divided by % change in price

• % change in supply divided by % change in demand

• % change in demand divided by % change in price

If the price of a product increases by 10% and the quantity supplied increases by 20%, what is the price elasticity of supply?

• 0.5

• 1

• 2

• 0.2

Which of the following best describes inelastic supply?

• Small response in quantity supplied when price rises

• Large response in quantity supplied when price rises

• Easy and inexpensive to increase production

• Elasticity of supply > 1

If the elasticity of supply is less than 1, what does this indicate about the supply?

• The supply is inelastic

• The supply is elastic

• The supply is perfectly elastic

• The supply is unit elastic

Which example best illustrates elastic supply?

• Snow-shoveling services

• Supply of mined gold

• Oil extraction

• Diamond mining

Explain why the supply of mined gold is considered inelastic, using evidence from the characteristics of inelastic supply.

• It is difficult and expensive to increase production, so quantity supplied changes little when price rises.

• It is easy and inexpensive to increase production, so quantity supplied changes greatly when price rises.

• The elasticity of supply is greater than 1, so supply responds strongly to price changes.

• The supply is perfectly elastic, so quantity supplied changes infinitely with price.