Microeconomics- Chapter 6: Elasticity (1)

90. The supply of product X is elastic if the price of X rises by: A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied remains the same. D. 7 percent and quantity supplied rises by 5 percent.

A. 5 percent and quantity supplied rises by 7 percent.

105. Supply curves tend to be: A. perfectly elastic in the long run because consumer demand will have sufficient time to adjust fully to changes in supply. B. more elastic in the long run because there is time for firms to enter or leave the industry. C. perfectly inelastic in the long run because the law of scarcity imposes absolute limits on production. D. less elastic in the long run because there is time for firms to enter or leave an industry.

B. more elastic in the long run because there is time for firms to enter or leave the industry.

146. 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: A. negative and therefore these goods are substitutes. B. negative and therefore these goods are complements. C. positive and therefore these goods are substitutes. D. positive and therefore these goods are complements.

B. negative and therefore these goods are complements.

95. It takes a considerable amount of time to increase the production of pork. This implies that: A. a change in the demand for pork will not affect its price in the short run. B. the short-run supply curve for pork is less elastic than the long-run supply curve for pork. C. an increase in the demand for pork will elicit a larger supply response in the short run than in the long run. D. the long-run supply curve for pork is less elastic than the short-run supply curve for pork.

B. the short-run supply curve for pork is less elastic than the long-run supply curve for pork.

93. The supply of product X is perfectly inelastic if the price of X rises by: A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied stays the same. D. 7 percent and quantity supplied rises by 5 percent.

C. 10 percent and quantity supplied stays the same.

96. Suppose that the price of product X rises by 20 percent and the quantity supplied of X increases by 15 percent. The coefficient of price elasticity of supply for good X is: A. negative and therefore X is an inferior good. B. positive and therefore X is a normal good. C. less than 1 and therefore supply is inelastic. D. more than 1 and therefore supply is elastic.

C. less than 1 and therefore supply is inelastic.

145. Suppose that a 10 percent increase in the price of normal good Y causes a 20 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is: A. negative and therefore these goods are substitutes. B. negative and therefore these goods are complements. C. positive and therefore these goods are substitutes. D. positive and therefore these goods are complements.

C. positive and therefore these goods are substitutes.

91. The supply of product X is inelastic (but not perfectly inelastic) if the price of X rises by: A. 5 percent and quantity supplied rises by 7 percent. B. 8 percent and quantity supplied rises by 8 percent. C. 10 percent and quantity supplied remains the same. D. 7 percent and quantity supplied rises by 5 percent.

D. 7 percent and quantity supplied rises by 5 percent.

103. If the supply of product X is perfectly elastic, an increase in the demand for it will increase: A. equilibrium quantity but reduce equilibrium price. B. equilibrium quantity but equilibrium price will be unchanged. C. equilibrium price but reduce equilibrium quantity. D. equilibrium price but equilibrium quantity will be unchanged.

D. equilibrium quantity but equilibrium price will be unchanged.