Timedora
Free Practice Quiz Question List

2 Price Elasticity of Supply Online Quiz Questions

Use this free practice quiz with 20 questions to review 2 Price Elasticity of Supply, test your knowledge, and prepare for your next test or exam.

20 questions
01
True or false
1 point

True or false: Price elasticity of supply has no units because it is calculated as a ratio of percentage changes.

  1. A

    True

  2. B

    False

02
Fill in the blank
1 point

Complete the definition: Price elasticity of supply is the percentage change in divided by the percentage change in price.

03
Choose one
1 point

A firm has unused machines and floor space. If the good's price rises, how does this spare capacity generally affect the firm's ability to increase quantity supplied?

  1. A

    Its supply is less elastic because it has spare capacity.

  2. B

    Its supply is more elastic because it has spare capacity.

  3. C

    Its supply is perfectly inelastic because it has spare capacity.

  4. D

    Its supply elasticity must equal one because it has spare capacity.

04
True or false
1 point

True or false: When comparing the same two price-and-quantity observations, the midpoint method gives the same elasticity whichever direction the comparison is made.

  1. A

    True

  2. B

    False

05
Fill in the blank
1 point

In the midpoint method, the percentage change in a variable is calculated using the of its starting and ending values as the denominator.

06
Choose one
1 point

A product has a price elasticity of supply of 1.61.6 over a measured interval. What does this indicate about its supply over that interval?

  1. A

    Quantity supplied changes by a smaller percentage than price.

  2. B

    Quantity supplied changes by the same percentage as price.

  3. C

    Quantity supplied changes by a larger percentage than price.

  4. D

    Quantity supplied does not respond to price.

07
Written response
1 point

A good has a price elasticity of supply of 0.70.7. What is the supply classification?

08
Choose all
1 point

Select all statements that correctly describe the midpoint method for calculating supply elasticity.

  1. A

    It uses the average of the starting and ending values when calculating percentage changes.

  2. B

    It gives the same elasticity whichever direction the comparison is made.

  3. C

    It calculates elasticity by dividing the dollar change in price by the unit change in quantity.

  4. D

    It gives an elasticity with units of quantity per dollar.

09
Choose one
1 point

A producer relies on scarce specialized labor but can substitute other inputs for some tasks. Which statement best describes how these conditions affect the producer's ability to increase quantity supplied?

  1. A

    Scarce specialized labor makes a large output increase easier, while input substitution reduces responsiveness.

  2. B

    Scarce specialized labor can constrain an output increase, while the ability to substitute other inputs can make supply more responsive.

  3. C

    Scarce specialized labor guarantees perfectly inelastic supply, regardless of whether substitutes are available.

  4. D

    Input scarcity and input substitution have no effect on seller responsiveness.

10
Written response
1 point

Quantity supplied rises from 4040 to 6060 units as price rises from $8\$8 to $10\$10. Using the midpoint method, what is the price elasticity of supply? Round your answer to one decimal place.

11
Choose all
1 point

Select all conditions that generally make supply more responsive to a price rise.

  1. A

    Sellers have several years to adjust production.

  2. B

    Firms have unused production capacity.

  3. C

    The labor and materials needed for production are readily available.

  4. D

    Firms are already operating near capacity and cannot obtain additional inputs.

12
Open ended
1 point

A seller's estimated price elasticity of supply is 1.441.44 over a measured range. Explain what this estimate means and what it does not guarantee.

13
Choose one
1 point

A good has a price elasticity of supply of 00. Which description fits its supply?

  1. A

    Quantity supplied changes by a larger percentage than price.

  2. B

    Quantity supplied does not respond to price.

  3. C

    Quantity supplied changes by the same percentage as price.

  4. D

    Quantity supplied changes by a smaller percentage than price, but must still rise.

14
True or false
1 point

True or false: Supply elasticity is usually positive because sellers generally have an incentive to offer more when a good's price rises.

  1. A

    True

  2. B

    False

15
Choose one
1 point

A seller’s price elasticity of supply is 0.6 over a measured interval. How is supply classified over that interval?

  1. A

    Elastic supply

  2. B

    Inelastic supply

  3. C

    Unit elastic supply

  4. D

    Perfectly inelastic supply

16
Choose one
1 point

Why is price elasticity of supply usually positive?

  1. A

    A price rise usually reduces sellers’ incentive to offer the good.

  2. B

    Quantity supplied is fixed at every possible price.

  3. C

    A price rise usually gives sellers an incentive to offer more.

  4. D

    Supply elasticity is always zero.

17
Written response
1 point

What units does price elasticity of supply have?

18
Choose one
1 point

Two firms face the same price increase. One has unused machinery and floor space; the other is operating near capacity. Which statement best describes the first firm’s short-run supply response?

  1. A

    It can often increase output quickly using its unused capacity.

  2. B

    It must already be producing at full capacity.

  3. C

    Its supply must be perfectly inelastic.

  4. D

    It cannot respond to a price rise until new firms enter.

19
Choose one
1 point

Which condition generally makes sellers more able to increase production when a good’s price rises?

  1. A

    Supply is more responsive when specialized inputs are scarce and have long delivery times.

  2. B

    Supply is generally more responsive when the inputs needed to produce the good are readily available.

  3. C

    Input availability affects demand elasticity, not supply elasticity.

  4. D

    Supply is more responsive when sellers cannot obtain materials or labor.

20
Written response
1 point

Quantity supplied rises from 80 units to 100 units. Using the midpoint method, what is the percentage change in quantity supplied? Round to the nearest hundredth of a percentage point. An absolute tolerance of 0.01 percentage points is allowed.