Suppose the Price Elasticity of Supply for Soccer Balls Is

question 63

Multiple Choice

Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2 in the long run.If an increase in the demand for soccer balls causes the price of soccer balls to increase by 20%,then the quantity supplied of soccer balls will increase by about

• A)0.67% in the short run and 0.17% in the long run.
• B)3% in the short run and 1.2% in the long run.
• C)6% in the short run and 24% in the long run.
• D)66.7% in the short run and 16.7% in the long run.

Describe the equilibrium process in the money market.

Explain the logic of liquidity preference theory and its effect on aggregate demand.

Understand the reasons for the downward slope of the aggregate-demand curve and the significance of the wealth, interest-rate, and exchange-rate effects.

Understand the principles and evidence supporting the matching hypothesis in relationships.

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