Question 1
What is meant by perfectly inelastic supply?
A.
PES > +1 — shallow S curve. B.
At least one factor fixed. C.
PES = 0 — fixed quantity. D.
Easier storage allows more elastic supply.
Question 2
What is meant by short run?
A.
At least one factor fixed. B.
Measure of responsiveness. C.
Reduce elastic supply in long run. D.
PES 0 to +1 — steep S curve.
Question 3
In the long run supply is usually:
A.
More inelastic B.
More elastic C.
Zero D.
Perfectly inelastic
Question 4
What is meant by inelastic supply?
A.
PES = +1. B.
At least one factor fixed. C.
All factors variable — supply more elastic. D.
PES 0 to +1 — steep S curve.
Question 5
What is meant by sunk costs?
A.
PES 0 to +1 — steep S curve. B.
% change in Qs ÷ % change in P. C.
PES = 0 — fixed quantity. D.
Costs not recovered on exit — affect firm decisions.
Question 6
What is meant by long run?
A.
PES = 0 — fixed quantity. B.
All factors variable — supply more elastic. C.
% change in Qs ÷ % change in P. D.
Easier storage allows more elastic supply.
Question 7
What is meant by unit elastic supply?
A.
At least one factor fixed. B.
Measure of responsiveness. C.
PES > +1 — shallow S curve. D.
PES = +1.
Question 8
PES measures responsiveness of:
A.
Supply to price B.
Government spending C.
Demand to income D.
Demand to price only
Question 9
What is meant by spare capacity?
A.
Firms below max output can respond quickly. B.
PES > +1 — shallow S curve. C.
PES = 0 — fixed quantity. D.
Measure of responsiveness.
Question 10
What is meant by elasticity?
A.
Measure of responsiveness. B.
Reduce elastic supply in long run. C.
PES = 0 — fixed quantity. D.
% change in Qs ÷ % change in P.
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