If a 5 Percent Increase in Price Results in a 3

question 221

Multiple Choice

If a 5 percent increase in price results in a 3 percent increase in the quantity supplied, the elasticity of supply is

• A) 0.30.
• B) 0.60.
• C) 1.20.
• D) 1.66.

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Definitions:

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at various prices.

Labor Services

The physical and mental efforts that people contribute to the production of goods and services.

Technology Changes

The process of innovation and the adoption of new or improved technologies and systems.

Demand For Labor

The total amount of hours of work that employers are willing to pay for at a given wage rate in the economy.