28th Oct Theory of Supply Quiz 1 – Punjab Meritorious School Preparation Portal

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Elasticity of supply refers to the degree of responsiveness of supply of a good to changes in its:

Demand

Price

Cost of production

State of technology

An increase in the supply of a good is caused by:

Improvements in its production technology

Fall in the prices of other goods which can be produced using the same inputs.

Fall in the prices of factors of production used in its production.

All of the above.

For a normal good with a downward sloping demand curve:

The price elasticity of demand is negative; the income elasticity of demand is negative.

The price elasticity of demand is positive; the income elasticity of demand is negative.

The price elasticity of demand is positive; the income elasticity of demand is positive.

The price elasticity of demand is negative; the income elasticity of demand is positive.

A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:

Zero

Infinite

Equal to one

Greater than zero but less than one

A vertical supply curve parallel to Y axis implies that the elasticity of supply is:

Zero

Infinity

Equal to one

Greater than zero but less than infinity.

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