The Price Elasticity of Supply Measures

question 8

Multiple Choice

The price elasticity of supply measures

• A) the responsiveness of quantity demanded to a change in price.
• B) the responsiveness of quantity supplied to a change in price.
• C) the change in supply due to a change in input prices.
• D) the change in price due to a change in quantity supplied.

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Definitions:

Comparative Advantage

Being able to manufacture a good or provide a service with a smaller opportunity cost than that of competing individuals, companies, or nations.

Absolute Advantage

The capacity of an entity to create a product or offer a service more effectively than its rivals, utilizing fewer resources.

Absolute Advantage

A country's ability to produce a certain good more efficiently than another country can.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, enabling trade and increased efficiency.