Question 1(Multiple Choice Worth 4 points) (02.04 MC)

Price Quantity Supplied
$1 4 units
$2 6 units
$3 8 units
$4 10 units

Based on the supply schedule above, which of the following is true of the product's price elasticity of supply?
It is violating the law of supply.
More information is needed.
It is −0.6 when increasing from $1 to $2.
It is 1.5 when increasing from $2 to $3.
It is 0.78 when increasing from $3 to $4.
Question 2(Multiple Choice Worth 4 points)
(02.04 LC)

The suppliers of Good A are more able to increase production in response to price increases than the suppliers of Good B. This means that the suppliers of Good A

have greater production costs
have a greater price elasticity of supply
should consider trading with the suppliers of Good B
sell inferior goods
must have an elasticity coefficient greater than 1
Question 3(Multiple Choice Worth 4 points)
(02.04 LC)

If the price of a good increases by 5% and the quantity supplied increases by 10%, which of the following is true for the given range?

The good is inelastic.
The good is unit elastic.
The price elasticity of supply is 0.5.
The price elasticity of supply is 2.
The price elasticity of supply is 50.
Question 4(Multiple Choice Worth 4 points)
(02.04 MC)

The price of apples increases by 10% and the quantity supplied increases by 5%. What is true of the supply of apples in this scenario?

It is able to respond quickly to changes in price.
It is an exception to the law of supply.
It is inelastic.
It is elastic.
It is unit elastic.
Question 5(Multiple Choice Worth 4 points)
(02.04 MC)

If a business increases its supply significantly based on a price increase, its price elasticity of supply is likely

unit elastic
dependent on demand
inelastic
determined by the law of increasing marginal utility
elastic
Which of the following must be true of the supply above?

The supply is relatively inelastic.
The supply is relatively elastic.
The supply is unit elastic.
The percentage change in quantity is greater than the percentage change in price.
The change in quantity is greater than the change in price at every point.