7) Running shoes are likely to have aelasticity of supply compared to bananas be
ID: 1132170 • Letter: 7
Question
7) Running shoes are likely to have aelasticity of supply compared to bananas because A) similar; both goods are easily produced B) lower; as incomes increase people are more likely to buy running shoes C) higher; as incomes increase people are more likely to buy running shoes D) higher; shoes are easier to store compared to bananas E) lower; shoes are easier to store compared to bananas 8) The supply of beach front property on St. Simon's Island is 8_ A) elastic. B) perfectly elastic. C) negative D) inelastic. E) unit elastic. ecause of this, we 9) It is very difficult for Gourmet Chocolatier to find inexpensive and available inputs for the business. B predict that Gourmet Chocolatier's supply to be 9) A) inelastic. B) nonexistent. C) unit elastic. D) perfectly elastic. E) elastic. 10) If a small percentage change in the price brings a very large percentage change in the quantity supplied, then the supply is almost perfectly and the supply curve is almost 10) A) elastic; 45 degrees B) inelastic; horizontal C) elastic; horizontal D) inelastic; vertical E) elastic; vertical 11) When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8. Hence A) inter-city bus trips are a normal good. B) the income elasticity of demand for inter-city bus trips is-0.56 C) the income elasticity of demand for inter-city bus trips is-1.8. D) Both answers A and B are correct. E) Both answers A and C are correct.Explanation / Answer
Answer 7: option D is correct .Running shoes are likely to have a higher elasticity of supply as compared to banana because shoes are easier to store as compared to banana as banana appreciable good and easily consumed at larger level.
Answer 8 : Option D is correct. The supply of beach front property on St Simon island has inelastic . As supply has not been changed with changes in supply.
Answer 9 Option C is correct. The Gournot chocolate to find inexpensive and available input for the business because of this we can predict that gournot chocolate of this we can predict supply curve is horizontal.
Answer 10 : Option C is correct. If a small percentage change in price brings a very large percentage change in the quantity supplied than supply is almost perfectly elastic and supply curve is almost horizontal.
Answer 11: Income elasticity of demand = % Change in qty / % Change in income
Income elasticity of demand = -2/10/10,000/20,000= -0.4
Option A is correct. As income elasticity of demand is -0.4
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