AP Microeconomics - Quiz 3.2

The main determinant of elasticity of supply is the:

amount of time the producer has to adjust inputs in response to a price change.

Which of the following goods will least likely suffer a decline in demand during a recession?

Toothpaste

A supply curve that is a vertical straight line indicates that:

a change in price will have no effect on the quantity supplied.

The cross elasticity of demand for product X with respect to the price of product Y is -1.2. It can be inferred that X and Y are:

complementary products

The larger the positive cross elasticity coefficient of demand between products X and Y, the:

greater their sustainability

Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is:

negative and therefore X is an inferior good.

Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decline in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is:

negative and therefore these goods are complements.

The formula for cross elasticity of demand is percentage change in:

quantity demanded of X/percentage change in price of Y.

Compared to coffee, we would expect the cross elasticity of demand for:

tea to be positive, but negative for cream.

Suppose the supply of product X is perfectly inelastic. If there is an increase in the demand for this product, equilibrium price:

will increase but equilibrium quantity will be unchanged.