Suppose an Increase in World Demand for Potash (Used in the Production

question 71

Multiple Choice

Suppose an increase in world demand for potash (used in the production of fertilizer) increases the price from $285 per tonne to $315 per tonne.Annual Canadian production increases from 15 million tonnes to 17 million tonnes.What is the elasticity of supply of Canadian potash?

• A)0.5
• B)0.8
• C)1.0
• D)1.25
• E)2.5

---

Definitions:

Signal-Detection Theory

A means to quantify the ability to discern between information-bearing patterns and random patterns that distract from the information.

Perceptual Ability

The capacity to interpret and make sense of information gathered through the senses.

Response Tendencies

The habitual patterns or tendencies of an individual to react in a particular way to stimuli.

Specificity Theory

A theory suggesting that specific receptors in the body are responsible for specific sensations like pain.