If the Supply of a Product Is Inelastic, a Large

question 50

Multiple Choice

If the supply of a product is inelastic, a large price increase will:

• A) not have an effect on the quantity supplied.
• B) only bring about a small increase in quantity supplied.
• C) cause the supply curve to increase by a nontrivial amount.
• D) cause a modest decrease in supply.

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Definitions:

International Trade Agreements

Treaties in which a country promises to engage in less trade protection against the exports of other countries in return for a promise by other countries to do the same for its own exports.

Autarky

An economic condition or system in which a country is self-sufficient and does not engage in international trade.

Consumer Surplus

The gap between the maximum sum consumers are ready to pay for a product or service and the sum they ultimately spend.

Autarky

This is a situation where a country or region is self-sufficient and does not engage in international trade with other countries.