The Coefficient of Price-Elasticity of Supply for a Product Is

question 326

Multiple Choice

The coefficient of price-elasticity of supply for a product is 1.2 if

• A)a 3 percent decrease in the price causes a 0.4 percent decrease in quantity supplied.
• B)a 3 percent decrease in price causes a 1.2 percent decrease in quantity supplied.
• C)a 3 percent decrease in price causes a 3.6 percent decrease in quantity supplied.
• D)a 1.2 percent decrease in price causes a 1.2 percent decrease in quantity supplied.

---

Definitions:

Modernization Theory

is a theoretical perspective that links societal development with the adoption of modern technological, political, and economic systems, traditionally viewing such modernization as a positive and linear progression.

Malthusian Theory

Proposes that population growth is potentially exponential while the growth of the food supply is linear, leading to overpopulation and societal issues.

Demographic Transition Theory

A theory that describes the transition from high birth and death rates to lower birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Cultural Diffusion

The process through which cultural beliefs, practices, technologies, or items spread from one society or cultural group to another.