What Is Price Elasticity of Supply

question 132

Multiple Choice

What is price elasticity of supply?

• A) It is the percentage change in the quantity supplied of a good or service divided by the percentage change in the price of the good or service.
• B) It is a measure of consumers' responsiveness to a change in price.
• C) It is the absolute value of the quantity supplied of a good or service and is always a negative number.
• D) It is the percentage change in the price of a good or service divided by the percentage change in the quantity supplied of the good or service.

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Definitions:

Fiscal Policy

Government policies concerning taxation and spending that are aimed at influencing macroeconomic conditions, including unemployment, inflation, and economic growth.

Fiscal Policy

Government policies related to taxation and spending aimed at influencing the economy.

MPC

Marginal Propensity to Consume, a metric in economics that measures the proportion of income changes that is spent on consumption.

Crowding Out

A decrease in investment that results from government borrowing.