Question : 17) If, for a given percentage decrease in price, quantity : 1387555

17) If, for a given percentage decrease in price, quantity supplied decreases by a proportionately smaller percentage, then supply is

A) unit-elastic.

B) perfectly elastic.

C) relatively inelastic.

D) elastic.

18) Bringing oil to the market is a relatively long and costly process. The whole process from exploration to pumping significant amounts of oil can take years. What does this indicate about the price elasticity of supply for oil?

A) The elasticity coefficient is likely to be very high, and supply is inelastic.

B) The elasticity coefficient is likely to be close to zero, and supply is perfectly elastic.

C) The elasticity coefficient is likely to be low, and supply is highly inelastic.

D) The elasticity coefficient is likely to be low, and supply is highly elastic.

19) Over longer periods of time, increases in oil prices provide firms with incentives to explore and recover oil. What does this indicate about the long-run price elasticity of supply for oil?

A) The elasticity coefficient is likely to be higher in the long run than in the short run.

B) The elasticity coefficient is likely to be lower in the long run than in the short run.

C) The elasticity coefficient approaches 0 in the long run as supplies are depleted.

D) The elasticity coefficient is unstable in the long run because oil supplies may be depleted.

20) Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as it desires. If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor. What does this indicate about the supply curve for janitorial services?

A) Supply is unit-elastic.

B) Supply is perfectly elastic.

C) Supply is perfectly inelastic.

D) Supply is relatively inelastic.

21) Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product decreases. Which of the following statements accurately predicts the resulting decrease in price?

A) The more elastic the supply curve, the greater the price increase.

B) The more elastic the supply curve, the smaller the price decrease.

C) The increase in price is not affected by the elasticity of the supply curve.

D) The decrease in price will always be proportional to the magnitude of the demand shift.

22) The price elasticity of supply measures

A) the responsiveness of quantity supplied to changes in input prices.

B) the responsiveness of quantity supplied to changes in technology.

C) the responsiveness of quantity supplied to changes in price.

D) a supplier’s ability to produce a good in the face of scarcity.

23) To calculate the price elasticity of supply we divide

A) the percentage change in price by the percentage change in quantity supplied.

B) the percentage change in quantity supplied by the percentage change in price.

C) rise by the run.

D) the average price by the average quantity supplied.

24) Suppose the supply of bicycles is price elastic. This means that

A) consumers will respond significantly to an increase in the quantity supplied of bicycles.

B) suppliers will increase the quantity supplied of bicycles, but not immediately.

C) suppliers face many substitutes for bicycles.

D) suppliers will respond significantly to changes in the price of bicycles.

25) If the quantity supplied of walkie-talkies increases by 5 percent when prices increase by 12 percent, then

A) the supply of walkie-talkies is inelastic.

B) the supply of walkie-talkies is elastic.

C) the walkie-talkie supply curve will shift to the right.

D) the walkie-talkie supply curve will shift to the left.

26) Suppose when the price of jean-jackets increased by 10 percent, the quantity supplied increased by 16 percent. Based on this information the price elasticity of supply of jean-jackets is

A) 0.625.

B) 6%.

C) 1.6.

D) 1.6%.