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.

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Definitions:

Adverse Selection

A situation in economic theory where information asymmetry results in high-risk individuals being more likely to apply for insurance or credit, potentially leading to market failure.

Insurance

A financial product that provides protection against potential future losses or damages to individuals or property.

Klutzes

Describes persons who are clumsy, often making mistakes or causing accidents in a somewhat comical or endearing way.

Personal Hygiene

Practices and habits that are intended to care for one's bodily health and well-being, through cleanliness.