Elasticity and Its Application 1297
54.
A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price
of $20.00, the t-
shirt maker would be willing to supply 100 t-shirts. Using the midpoint method,
the price elasticity of supply for t-
shirts is about
a.
0.37, and supply is elastic.
b.
0.37, and supply is inelastic.
c.
2.71, and supply is elastic.
d.
2.71, and supply is inelastic.
55.
In January the price of dark chocolate candy bars was $2.00, and Willy’s Chocolate Factory
produced 80 pounds. In
February the price of dark chocolate candy bars was $2.50, and Willy’s
produced 110 pounds. In March the price of
dark chocolate candy bars was $3.00, and Willy’s
produced 140 pounds. The price elasticity of supply of Willy’s
dark chocolate candy bars was
about
a.
0.70 when the price increased from $2.00 to $2.50 and 0.76 when the price increased from
$2.50 to $3.00.
b.
0.88 when the price increased from $2.00 to $2.50 and 1.08 when the price increased from
$2.50 to $3.00.
c.
1.42 when the price increased from $2.00 to $2.50 and 1.32 when the price increased from
$2.50 to $3.00.
d.
1.50 when the price increased from $2.00 to $2.50 and 1.18 when the price increased from
$2.50 to $3.00.
56.
In January the price of widgets was $1.00, and Wendy’s Widgets produced 80 widgets. In
February the price of
widgets was $1.50, and Wendy’s Widgets produced 110 widgets. In March
the price of widgets was $2.00, and
Wendy’s Widgets produced 140 widgets. The price elasticity
of supply of Wendy’s Widgets was about
a.
0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from
$1.50 to $2.00.
b.
1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from
$1.50 to $2.00.
c.
0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from
$1.50 to $2.00.
d.
1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from
$1.50 to $2.00.
57.
At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day. At a price of
$1.40, the
manufacturer is willing to supply 170 boxes per day. Using the midpoint method, the
price elasticity of supply is about
a. 2.0.
b. 1.23.
c. 1.00.
d. 0.81.
58.
At price of $1.30 per pound, a local apple orchard is willing to supply 150 pounds of apples per
day. At a price of
$1.50 per pound, the orchard is willing to supply 170 pounds of apples per day. Using the midpoint
method, the price
elasticity of supply is about
a. 1.14.
b. 1.00.
c. 0.875.
d. 0.50.
59.
At price of $1.25, a paper manufacturer is willing to supply 150 spiral notebooks per day. At a
price of $1.50, the
paper manufacturer is willing to supply 175 spiral notebooks per day. Using the
midpoint method, the price elasticity
of supply is about
a. 1.18.
b. 1.00.
c. 0.85.
d. 0.25.
1300 Elasticity and Its Application
Figure 5–14
60.
Refer to Figure 5-14. Over which range is the supply curve in this figure the most elastic?
a. $16 to $40
b. $40 to $100
c. $100 to $220
d. $220 to $430
Elasticity and Its Application 1301
61.
Refer to Figure 5-14. Over which range is the supply curve in this figure the least elastic?
a. $16 to $40
b. $40 to $100
c. $100 to $220
d. $220 to $430
62.
Refer to Figure 5-14. Using the midpoint method, what is the price elasticity of supply between
$16 and $40?
a. 0.125
b.
0.86
c.
1.0
d.
2.5
63.
Refer to Figure 5–14. Using the midpoint method, what is the price elasticity of supply between
$100 and $220?
a. 0.58
b.
0.67
c.
1.00
d.
1.73
Figure 5–15
Elasticity and Its Application 1303
64.
Refer to Figure 5-15. Along which of these segments of the supply curve is supply least elastic?
a.
GH
b.
CD
c.
AC
d.
AB
65.
Refer to Figure 5-15. Along which of these segments of the supply curve is supply most
elastic?
a.
AB
b.
CD
c.
DH
d.
GH
66.
Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between
points A and B?
a. 2.33
b.
1.0
c.
0.43
d.
0.1
67.
Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between
points B and C?
a. 1.67
b.
1.19
c.
0.84
d.
0.61
68.
Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between
points C and D?
a. 0.21
b.
0.29
c.
0.73
d.
1.36
69.
Refer to Figure 5-15. Using the midpoint method, what is the price elasticity of supply between
points D and G?
a. 1.89
b.
1.26
c.
0.53
d.
0.34
1306 Elasticity and Its Application
Figure 5–16
70.
Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between
$4 and $6?
a. 0.75
b.
1.00
c.
1.20
d.
1.25
Elasticity and Its Application 1307
71.
Refer to Figure 5-16. Using the midpoint method, what is the price elasticity of supply between
$6 and $8?
a. 0.86
b.
1.00
c.
1.17
d.
1.25
Figure 5–17
72.
Refer to Figure 5-17. Using the midpoint method, what is the price elasticity of supply between
point A and point
B?
a.
0.4
b.
0.6
c.
1.67
d.
2.16
73.
Refer to Figure 5-17. Using the midpoint method, what is the price elasticity of supply between
point B and point
C?
a.
1.44
b.
1.29
c.
0.96
d.
0.69
74.
Refer to Figure 5-17. If, holding the supply curve fixed, there were an increase in demand that
caused the equilibrium price to increase from $6 to $7, then sellers’ total revenue would
a.
increase.
b.
decrease.
c.
remain unchanged.
d.
The effect on total revenue cannot be determined from the given information.
Figure 5–18
75.
Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between
$4 and $5?
a. 0.50
b.
0.56
c.
1.80
d.
2.00
76.
Refer to Figure 5-18. Using the midpoint method, what is the price elasticity of supply between
$5 and $6?
a. 0.60
b.
0.64
c.
1.57
d.
1.67
77.
If sellers respond to very small changes in price by adjusting their quantity supplied by extremely
large amounts, the
price elasticity of supply approaches
a.
zero, and the supply curve is horizontal.
b.
zero, and the supply curve is vertical.
c.
infinity, and the supply curve is horizontal.
d.
infinity, and the supply curve is vertical.
78.
Which of the following statements is valid when supply is perfectly elastic at a price of $4?
a.
The elasticity of supply approaches infinity.
b.
The supply curve is vertical.
c.
At a price below $4, quantity supplied is infinite.
d.
At a price above $4, quantity supplied is zero.
79.
Which of the following statements is not valid when supply is perfectly elastic?
a.
The elasticity of supply approaches infinity.
b.
The supply curve is horizontal.
c.
Very small changes in price lead to very large changes in quantity supplied.
d.
The time period under consideration is more likely a short period rather than a long period.
80.
When supply is perfectly elastic, the value of the price elasticity of supply is
a.
0.
b.
1.
c.
greater than 0 and less than 1.
d.
infinity.
81.
As the price elasticity of supply approaches infinity, very small changes in price lead to
a.
very large changes in quantity supplied.
b.
very small changes in quantity supplied.
c.
no change in quantity supplied.
d.
None of the above is correct.
82.
If the price elasticity of supply for a good is equal to infinity, then the
a.
supply curve is vertical.
b.
supply curve is horizontal.
c.
supply curve also has a slope equal to infinity.
d.
quantity supplied is constant regardless of the price.
83.
A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price
elasticity of supply is
a.
infinity.
b.
zero.
c.
one.
d.
negative one.
84.
If sellers do not adjust their quantity supplied at all in response to a change in price, the price
elasticity of supply is
a.
zero, and the supply curve is horizontal.
b.
zero, and the supply curve is vertical.
c.
infinity, and the supply curve is horizontal.
d.
infinity, and the supply curve is vertical.
85.
Which of the following statements is valid when the market supply curve is vertical?
a.
Market quantity supplied does not change when the price changes.
b.
Supply is perfectly elastic.
c.
An increase in market demand will increase the equilibrium quantity.
d.
An increase in market demand will not increase the equilibrium price.
86.
Which of the following statements is not valid when the market supply curve is vertical?
a.
Market quantity supplied does not change when the price changes.
b.
Supply is perfectly inelastic.
c.
An increase in market demand will increase the equilibrium quantity.
d.
An increase in market demand will increase the equilibrium price.
87.
If the quantity supplied is the same regardless of price, then supply is
a.
elastic.
b.
perfectly elastic.
c.
perfectly inelastic.
d.
inelastic.
88.
If sellers do not adjust their quantities supplied at all in response to a change in price,
a.
advances in technology must be prevalent.
b.
the time period under consideration must be very long.
c.
supply is perfectly elastic.
d.
supply is perfectly inelastic.