If the Elasticity of Supply Is 2

question 189

Multiple Choice

If the elasticity of supply is 2.0, what happens to quantity supplied following a 7 percent increase in price? Quantity supplied increases:

• A) 3.5 percent.
• B) 2.9 percent.
• C) 14 percent.
• D) 9 percent.

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Definitions:

Ceiling Effect

Failure of a measure to detect a difference because it was too easy (also see floor effect).

Strongest Manipulation

In experimental research, the use of the most extreme or powerful version of the independent variable to assess its effects.

Nonsignificant Findings

Results of a statistical analysis that do not meet the criteria for significance, indicating that any observed effect might be due to chance.

Confederate

In psychological research, a person who pretends to be a participant but in fact is part of the research team, used to manipulate social interactions as part of the experiment.