Price Elasticity of Supply - AP Microeconomics

1. Choose the supply elasticity: long run.

   Elastic. Sufficient time enables full production capacity adjustments.

2. Choose the supply elasticity: immediate market period.

   Perfectly inelastic. No time to adjust production in immediate period.

3. Calculate $E_s$ if $\%\Delta Q_s = 0\%$ and $\%\Delta P = 5\%$.

   $E_s = 0$. Zero quantity change means perfectly inelastic supply.

4. State the term for $E_s = 1$ in price elasticity of supply.

   Unit elastic supply. Percentage changes in quantity and price are equal.

5. How does increased storage ability affect supply elasticity?

   Increases elasticity. Storage allows producers to better respond to price changes.

6. What is the price elasticity of supply if the percentage change in quantity supplied equals the percentage change in price?

   Unit elastic. Equal percentage changes result in $E_s = 1$.

7. What is the elasticity of supply for a good with limited resources?

   Inelastic. Limited resources constrain production expansion ability.

8. Choose the elasticity when a large price increase results in a small supply increase.

   Inelastic. Small quantity response to large price change indicates inelastic supply.

9. Find the price elasticity of supply if $\%\Delta Q_s = 5\%$ and $\%\Delta P = 10\%$.

   $E_s = 0.5$. Using formula: $E_s = \frac{5\%}{10\%} = 0.5$.

10. What does a perfectly elastic supply curve look like?

    Horizontal line. Any price change causes infinite quantity response ($E_s = ∞$).

11. State the term for $E_s > 1$ in price elasticity of supply.

    Elastic supply. Supply is responsive to price changes when $E_s > 1$.

12. State the relationship between time and elasticity of supply.

    More time, more elastic. Longer time periods allow greater production adjustments.

13. What happens to supply elasticity in the short run with fixed production capacity?

    Less elastic. Fixed capacity limits ability to adjust quantity supplied.

14. State the term for $E_s < 1$ in price elasticity of supply.

    Inelastic supply. Supply is less responsive to price changes when $E_s < 1$.

15. What is the formula for calculating price elasticity of supply?

    $E_s = \frac{\%\Delta Q_s}{\%\Delta P}$. Measures percentage change in quantity supplied per percentage change in price.

16. Calculate $E_s$ if $\%\Delta Q_s = 15\%$ and $\%\Delta P = 20\%$.

    $E_s = 0.75$. Using formula: $E_s = \frac{15\%}{20\%} = 0.75$.

17. Determine elasticity if $\%\Delta Q_s = 30\%$ and $\%\Delta P = 10\%$.

    $E_s = 3$. Using formula: $E_s = \frac{30\%}{10\%} = 3$.

18. Choose the elasticity when a price change leads to infinite quantity change.

    Perfectly elastic. Infinite responsiveness indicates perfectly elastic supply.

19. What is the effect on supply elasticity if production is highly flexible?

    More elastic. Flexible production allows easier quantity adjustments to price changes.

20. Identify the factor that affects price elasticity of supply: flexibility of production.

    Flexibility of production. More flexible production enables greater quantity adjustments.

21. What is the elasticity of supply for a commodity with a long production period?

    Inelastic. Long production time limits quick supply adjustments.

22. Identify the factor that affects price elasticity of supply: time period.

    Time period. More time allows greater adjustment flexibility.

23. Identify the effect on supply elasticity if production requires specialized inputs.

    Less elastic. Specialized inputs are harder to obtain quickly.

24. Identify the factor that affects price elasticity of supply: availability of inputs.

    Availability of inputs. Scarce inputs limit ability to increase production.

25. Choose the elasticity when a small price increase results in a large supply increase.

    Elastic. Large quantity response to small price change indicates elastic supply.

26. Calculate $E_s$ if $\%\Delta Q_s = 5\%$ and $\%\Delta P = 5\%$.

    $E_s = 1$. Equal percentage changes yield unit elastic supply.

27. What is the effect on supply elasticity if inputs are readily available?

    More elastic. Available inputs enable producers to respond more to price changes.

28. Choose the supply elasticity: short run.

    Inelastic. Limited time allows only minimal production adjustments.

29. Identify the elasticity when the supply curve is perfectly horizontal.

    Perfectly elastic. Horizontal curve means infinite responsiveness to price changes.

30. Find the price elasticity of supply if $\%\Delta Q_s = 10\%$ and $\%\Delta P = 5\%$.

    $E_s = 2$. Using formula: $E_s = \frac{10\%}{5\%} = 2$.

31. What happens to supply elasticity in the long run with adjustable production capacity?

    More elastic. Time allows adjustment of all production factors.

32. Choose the elasticity when a price change leads to no quantity change.

    Perfectly inelastic. Zero responsiveness indicates perfectly inelastic supply.

33. Identify the measure of responsiveness of quantity supplied to a price change.

    Price elasticity of supply. Measures how quantity supplied responds to price changes.

34. What is the impact of technological advancement on supply elasticity?

    Increases elasticity. Technology improves production flexibility and responsiveness.

35. What is the elasticity of supply for a good with readily available resources?

    Elastic. Available resources enable quick production increases.

36. Identify the elasticity when the supply curve is perfectly vertical.

    Perfectly inelastic. Vertical curve means zero responsiveness to price changes.

37. What does a perfectly inelastic supply curve look like?

    Vertical line. Quantity supplied cannot change regardless of price ($E_s = 0$).

38. Identify the elasticity of supply when firms can fully adjust all inputs.

    Elastic. Full input adjustment enables maximum responsiveness to price.

39. Calculate $E_s$ if $\%\Delta Q_s = 20\%$ and $\%\Delta P = 10\%$.

    $E_s = 2$. Using formula: $E_s = \frac{20\%}{10\%} = 2$.

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