Question : 81) Consider a firm’s price elasticity of supply. If firms’ : 1384162

81) Consider a firm’s price elasticity of supply. If firms’ costs rise rapidly as output increases, the

A) supply curve will tend to be flat.

B) demand curve will tend to be steep.

C) elasticity of demand will tend to be low.

D) price elasticity of supply will tend to be high.

E) price elasticity of supply will tend to be low.

82) An upward-sloping straight-line supply curve through the origin has an elasticity of

A) one.

B) greater than one.

C) less than one.

D) infinity.

E) zero.

83) A value of infinity for the elasticity of supply of some product implies that

A) the supply curve is horizontal.

B) supply is very unresponsive to price.

C) the supply curve is vertical.

D) the product will be supplied at any price.

E) no product will be supplied at any price.

84) Given that elasticity of supply changes over time, in the short run an increase in demand will generally cause

A) the price to rise above its long-run equilibrium value.

B) the price to rise to a level below its long-run equilibrium value.

C) the quantity exchanged to rise above its long-run equilibrium value.

D) both price and quantity exchanged to rise above their long-run equilibrium values.

E) supply to change.

85) Refer to Figure 4-3. The diagram shows a rightward shift in the demand curve for some good, and the short-run and long-run supply curves (SS and SL, respectively). In the new short-run equilibrium after the increase in demand, producers’ revenue

A) is unambiguously lower than in the long-run equilibrium at EL.

B) could be higher or lower than at E0, depending on the short-run elasticity of supply.

C) is unambiguously higher than at E0.

D) is unambiguously lower than at E0.

E) is unambiguously higher than at EL.

86) Refer to Figure 4-3, which shows a demand shift and the short-run and long-run supply curves for some good. The diagram illustrates the general principle that

A) supply is less elastic in the long run.

B) demand is less elastic in the long run.

C) supply is more elastic in the long run.

D) both demand and supply are less elastic in the long run.

E) demand is more elastic in the long run.

87) Refer to Figure 4-3, which shows a demand shift and the short-run and long-run supply curves for some product. In the new long-run equilibrium at EL, producers’ revenue

A) is unambiguously lower than at ES.

B) could be higher or lower than at ES, depending on the price elasticity of demand.

C) is unambiguously lower than at E0.

D) could be higher or lower than at E0, depending on the price elasticity of demand.

E) is unambiguously higher than at ES.

88) The imposition of an excise tax usually causes the price paid by consumers to ________, while the price received by sellers ________.

A) rise; remains unchanged

B) rise; falls

C) rise; rises

D) fall; remains unchanged

E) fall; falls

89) Consumers will bear a larger burden of an excise tax if

A) demand is relatively elastic and supply is relatively inelastic.

B) demand is relatively inelastic and supply is relatively elastic.

C) both demand and supply are relatively inelastic.

D) both demand and supply are relatively elastic.

E) the tax is collected by firms rather than remitted directly to the government by consumers.

90) The imposition of an excise tax will cause the least burden on consumers when demand is

A) elastic.

B) unit elastic.

C) perfectly inelastic.

D) perfectly elastic.

E) vertical.