The Price Elasticity of Supply Is Usually a Positive Number

question 111

Multiple Choice

The price elasticity of supply is usually a positive number because:

• A)quantity supplied increases in response to income increases.
• B)quantity supplied increases in response to price increases.
• C)the quantity demanded usually rises when price falls, and therefore suppliers would want to capitalise on this increase in demand.
• D)price rises when supply increases.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, factoring in its current market price, par value, interest payments, and time to maturity.

Current Yield

The yearly earnings from interest or dividends, when divided by the security's current market price.

Capital Gains Yield

Results from changing prices and is calculated as (P1 - P0)/P0, where P0 is the beginning-of-period price and P1 is the end-of-period price.

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime.