A market supply curve has three prices -$6.50, $7.00 and $7.50 – with a quantity supplied of 7 tonnes at the price of $6.50, 9 tonnes at $7.00, and 11 tonnes at $7.50. a. Is this supply curve a straight line? O This curve is a straight line because it has a constant slope of 1. O This curve is not a straight line because it does not have a constant slope. O This curve is a straight line because it has a constant slope of 0.5. O This curve is a straight line because it has a constant slope of 0.25. b. What is the price elasticity of supply, es, between prices $6.50 and $7.00 and between prices $7.00 and $7.50? Do not round your interim calculations before obtaining the final solution (i.e. do not clear your calculator). In each case, express the number to two decimal places and do not include a positive or negative sign (i.e. 1.67, not -1.7 or +1.667). The price elasticity of supply is between prices $6.50 and $7.00, and is between prices $7.00 and $7.50. c. Based on your answers to parts (a) and (b), must a supply curve with a constant slope have a constant numerical elasticity? O A supply curve with a constant slope must have a constant supply elasticity. O A supply curve with a constant slope does not need to have a constant elasticity. O A supply curve whose slope varies has a supply elasticity which varies by exactly the same proportions. O A supply curve whose slope varies must have a constant supply elasticity.
A market supply curve has three prices -$6.50, $7.00 and $7.50 – with a quantity supplied of 7 tonnes at the price of $6.50, 9 tonnes at $7.00, and 11 tonnes at $7.50. a. Is this supply curve a straight line? O This curve is a straight line because it has a constant slope of 1. O This curve is not a straight line because it does not have a constant slope. O This curve is a straight line because it has a constant slope of 0.5. O This curve is a straight line because it has a constant slope of 0.25. b. What is the price elasticity of supply, es, between prices $6.50 and $7.00 and between prices $7.00 and $7.50? Do not round your interim calculations before obtaining the final solution (i.e. do not clear your calculator). In each case, express the number to two decimal places and do not include a positive or negative sign (i.e. 1.67, not -1.7 or +1.667). The price elasticity of supply is between prices $6.50 and $7.00, and is between prices $7.00 and $7.50. c. Based on your answers to parts (a) and (b), must a supply curve with a constant slope have a constant numerical elasticity? O A supply curve with a constant slope must have a constant supply elasticity. O A supply curve with a constant slope does not need to have a constant elasticity. O A supply curve whose slope varies has a supply elasticity which varies by exactly the same proportions. O A supply curve whose slope varies must have a constant supply elasticity.
Chapter1: Making Economics Decisions
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Problem 1QTC
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A market supply curve has three prices -$6.50, $7.00 and $7.50 – with a quantity supplied of 7 tonnes at the price of $6.50, 9
tonnes at $7.00, and 11 tonnes at $7.50.
a. Is this supply curve a straight line?
O This curve is a straight line because it has a constant slope of 1.
O This curve is not a straight line because it does not have a constant slope.
O This curve is a straight line because it has a constant slope of 0.5.
O This curve is a straight line because it has a constant slope of 0.25.
b. What is the price elasticity of supply, es, between prices $6.50 and $7.00 and between prices $7.00 and $7.50? Do not round your
interim calculations before obtaining the final solution (i.e. do not clear your calculator). In each case, express the number to two decimal places and do not include a
positive or negative sign (i.e. 1.67, not -1.7 or +1.667).
The price elasticity of supply is
between prices $6.50 and $7.00, and is
between prices $7.00 and $7.50.
c. Based on your answers to parts (a) and (b), must a supply curve with a constant slope have a constant numerical elasticity?
O A supply curve with a constant slope must have a constant supply elasticity.
O A supply curve with a constant slope does not need to have a constant elasticity.
O A supply curve whose slope varies has a supply elasticity which varies by exactly the same proportions.
O A supply curve whose slope varies must have a constant supply elasticity.
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