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.