The table shows the quantity that producers are willing to supply at different price levels.
price ($) | quantity supplied |
120 150 180 | 20 40 80 |
If the price increases from $120 to $180, what would be the price elasticity of supply?
0.16
4
6
60
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The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $10 to $12?
0.5
0.75
1.4
2.0
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Which of the following would likely result in a more elastic supply?
Unique and specialised products
Easy availability of production inputs
Limited production capacity
High storage costs
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Which of the following factors does not influence the price elasticity of supply?
The mobility of the factors of production
The availability of substitutes
Spare capacity
The time period involved
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The PES of salt is considered to be relatively elastic in the long term.
Which of the following illustrations would best demonstrate this?
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The table shows the effect of a change in the market price from $5 to $6 on the supply of mobile (cell) phones.
price ($) | supply (units) |
5 6 | 10000 15000 |
Which statement about the price elasticity of supply of mobile phones is correct?
Price elasticity of supply is 0.4.
Price elasticity of supply is 2.5.
Supply is perfectly elastic.
There is unit elasticity.
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The price elasticity of supply of a good is 2. The price of the good then falls by 10%.
What is the effect on quantity supplied?
It falls by 0.2%.
It falls by 20%.
It increases by 0.2%.
It increases by 20%.
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Which of the following statements about the price elasticity of supply (PES)? is accurate?
PES measures the responsiveness of quantity demanded to a change in price
PES is applicable only to luxury goods and not to essential commodities
A product with perfectly elastic supply has an infinite PES value
PES values are always negative due to the inverse relationship between price and quantity supplied
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What is the key characteristic of a product with a perfectly inelastic price elasticity of supply (PES)?
Producers can easily adjust production quantities
The PES value is equal to 1
Consumers are highly responsive to price changes
Quantity supplied remains constant regardless of price changes
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If the price elasticity of supply (PES) of a product is 0.5, what can be inferred about the supply responsiveness?
Supply is highly responsive to price change
Supply is inelastic and less responsive to price changes
Supply is perfectly elastic
Supply is constant regardless of price changes
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A technological innovation leads to a significant increase in the production capacity of a product with inelastic supply. How might this impact the stakeholders involved?
Producers' revenue will decrease
Consumers will benefit from lower prices
Producers will reduce their production
Consumers' demand will become less elastic
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Which of the following products is most likely to have an inelastic supply?
Generic office supplies like paper and pens
Bottled water during a water shortage
Fashion clothing with rapidly changing trends
Handcrafted artwork by a renowned artist
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1 markA product has a price elasticity of supply (PES) of 0.3. If the price of the product decreases by 8%, by how much will the quantity supplied change?
0.24%
0.8%
2.4%
24%
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1 markA product with a price elasticity of supply (PES) of 1.2 experiences a 15% decrease in price. By what percentage will the quantity supplied change?
10%
18%
15%
12%
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A product has a price elasticity of supply (PES) of 0.2. How might this impact consumers and producers during a sudden surge in demand?
Consumers will face significantly higher prices, and producers will increase output a little
Consumers will face minimal price changes, and producers will struggle to increase production
Consumers will experience lower prices due to increased production, and producers will gain substantial revenue
Consumers will experience higher prices, and producers will lower production to maintain scarcity
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