Tag: theory of supply

Questions Related to theory of supply

The supply is __________, when a greater change in price leads to smaller change in quantity supplied.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. relatively more elastic

  2. perfectly elastic

  3. perfectly inelastic

  4. relatively inelastic

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Correct Option: D

The percentage change in quantity supplied due to percentage change in price is called __________.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. elasticity of supply

  2. law of supply

  3. supply curve

  4. elasticity of demand

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Correct Option: A
Supply is more elastic in case of ______________.
economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. very short period

  2. short period

  3. long period

  4. both (b) and (c)

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Correct Option: C
When 15% increase in price of the commodity causes 10% increase in the quantity supplied, then elasticity of supply is _____________.
economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. elastic

  2. inelastic

  3. perfectly elastic

  4. perfectly inelastic

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Correct Option: B

Write True or False with a reason.
Price elasticity of supply measures the change in quantity supplied in response to a change in own price of the commodity.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. True

  2. False

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Correct Option: A
Explanation:

True. Price elasticity of supply$=\cfrac { Percentage\quad change\quad in\quad quantity\quad supplied }{ Percentage\quad change\quad in\quad price } $

CRR refers to the share of_____________ that rural banks have to maintain with RBI of their net demand and time liabilities?

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. Liquid cash

  2. Gold

  3. Forex reserves

  4. Illiquid cash

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Correct Option: A

When the Cross Price Elasticity of demand between two goods is zero then those goods are called?

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. Independent goods

  2. Luxury goods

  3. Substitute goods

  4. Complementary goods

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Correct Option: A

Rent will be produced at that time when ________.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. entire land is fertile

  2. elasticity of supply of land is perfectly elastic

  3. land is mobile

  4. none of the above

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Correct Option: B
Explanation:

Rent on land will be produced only when different types of lands are differently fertile. At the same time, the supply of land should be elastic and not perfectly elastic.

Land is the only factor of production whose supply is _____.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. more elastic

  2. perfectly elastic

  3. perfectly inelastic

  4. unitary elastic

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Correct Option: C
Explanation:

A perfectly inelastic supply curve is a vertical line at a given quantity, which shows a constant supply regardless of price. Land becomes one such factor of production.

The horizontal demand curve parallel to X-axis implies that the elasticity of demand is ______.

economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

  1. zero

  2. infinite

  3. equal to one

  4. greater than zero but less than infinity

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Correct Option: B
Explanation:

The horizontal demand curve parallel to X-axis implies that the elasticity of demand is infinite.