The Price Elasticity of Supply Measures How

question 21

Multiple Choice

The price elasticity of supply measures how:

• A)easily labour and capital can be substituted for one another in the production process
• B)responsive the quantity supplied of X is to changes in the price of X
• C)responsive the quantity supplied of Y is to changes in the price of X
• D)responsive quantity supplied is to a change in incomes
• E)responsive the quantity supplied of X is to changes in resource prices

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Definitions:

Aggregate Demand

The entirety of demand for goods and services in an economic setting, pegged at an established price level and during a defined time.

Unemployment Rate

The percentage of the workforce currently without jobs and actively searching for employment.

Natural Rate

Often refers to the natural rate of unemployment where the labor market is in equilibrium, or the natural rate of interest that equates savings and investment.

Unemployment Rate

The segment of the labor population that is without employment and actively seeking a job.