What is measured by the price elasticity of supply?
A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods.
B) The price elasticity of supply measures how responsive producers are to changes in income.
C) The price elasticity of supply measures how responsive producers are to changes in the price of a product.
D) The price elasticity of supply is a measure of the slope of the supply curve.
E) The price elasticity of supply measures how responsive producers are to changes in the cost of producing a product.
C
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Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, the only time that changes in government policies have real effects is when
A) the changes are unanticipated. B) the changes involve monetary policy. C) the changes involve fiscal policy. D) the changes affect aggregate demand.
Refer to Figure 2-11. What is the opportunity cost of producing 1 bolt of cotton in Indonesia?
A) 3/8 of a pound of cashews B) 5/8 of a pound of cashews C) 2 2/3 pounds of cashews D) 120 pounds of cashews