Regarding the concept of price-elasticity, which statement is incorrect? O a. A linear demand has constant slope, but variable price-elasticity. а. O b. In terms of price-elasticity, a linear demand or supply with zero slope is perfectly elastic. Oc. Price-elasticities are often lower in the short run than in the long run. O d. If supply is price-inelastic, shifts in demand will have a larger effect on the equilibrium quantity than on the equilibrium price. e. When demand is price-inelastic, decreases in P offset increases in Q, meaning less revenue (PQ) for producers.

Regarding the concept of price-elasticity, which statement is incorrect? O a. A linear demand has constant slope, but variable price-elasticity. а. O b. In terms of price-elasticity, a linear demand or supply with zero slope is perfectly elastic. Oc. Price-elasticities are often lower in the short run than in the long run. O d. If supply is price-inelastic, shifts in demand will have a larger effect on the equilibrium quantity than on the equilibrium price. e. When demand is price-inelastic, decreases in P offset increases in Q, meaning less revenue (PQ) for producers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 1 When production of a good can be expanded without significantly increasing the overall demand for its inputs: O a.supply for this good will tend to be more inelastic. O b.supply for this good will tend to be more elastic. O c. price for the good will be constant. O d. the elasticity of supply of the product will equal the elasticity of supply of the inputs.
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1. Optimal choice of capital Eleanor makes sweaters in her home. Starting with just some knitting needles and yarn, she was able to knit 60 sweaters per year. Now some local stores have expressed interest in her designs and offered to buy her sweaters for $10 each. This makes it worthwhile for her to invest in some capital; in particular, she could produce many more sweaters if she invested in one or more looms, as shown in the following table. Assume that Eleanor's sweater business is a perfectly competitive firm. Complete the following table by calculating the marginal physical product (MPP) of each loom and the marginal revenue product (MRP) of each loom. Quantity of Input (Looms) Output (Sweaters per year) MPP of Each Loom (Sweaters) MRP of Each Loom (Dollars) 0 1 2 3 4 5 60 110 150 184 213 238 50 40 34 29 25 If the rental price of a loom is $270 per year, Eleanor should use 500 400 340 290 250 Suppose the demand for sweaters is very elastic, while the demand for cigarettes is very…
A $1-per-gallon tax on the sale of gasoline will raise the price by $1 per gallon if Select one: a. the supply is perfectly inelastic. O b. the demand is unit elastic. the supply is perfectly elastic. O d. the demand is perfectly elastic.
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14. Assume the following occurs in a market: General Electric (only company in town) raises your electric bill drastically in fees. Does electricity have an inelastic or elastic demand? * A. Elastic O B. Inelastic
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