In January the Price of Widgets Was $1

question 12

Multiple Choice

In January the price of widgets was $1.00,and Wendy's Widgets produced 80 widgets.In February the price of widgets was $1.50,and Wendy's Widgets produced 110 widgets.In March the price of widgets was $2.00,and Wendy's Widgets produced 140 widgets.The price elasticity of supply of Wendy's Widgets was about

• A)0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.
• B)1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00.
• C)0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00.
• D)1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.

---

Definitions:

MRP

Marginal Revenue Product, representing the additional revenue generated by employing one more unit of a factor, such as labor or capital.

Rent

Rent is the payment made by a tenant to a landlord for the use of a property, room, or piece of land for a specified period.

Marginal Revenue Product

The additional revenue a firm generates from employing one more unit of input, such as labor or capital.

Wage Rate

The standard amount of pay given for work performed, typically expressed in terms of pay per hour or pay per unit of work done.