Elasticity and Incentives

Question 1

The graph shows the price of a good compared to the quantity demanded and the quantity supplied.On this graph, what does the green arrow represent?

Revolt · Accepted Answer

an effective price ceiling set below equilibrium causing a shortage.

Question 2

The graph shows the price of green tea compared to the amount supplied by producers.What does this graph suggest about green tea? Choose two answers.Green tea is elastic in terms of supply.Green tea is inelastic in terms of supply.Green tea is neither elastic nor inelastic.The supply of green tea changes sharply with the price.The quantity supplied of green tea does not change sharply with the price.

Question 3

best

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Incentives can be positive or negative.

Question 4

In the market, actions known as incentives affect

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consumers or producers.

Question 5

Price controls on goods can be set by

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governments.

Question 6

Goods that are considered to be needs tend to be

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inelastic when the price changes.

Question 7

Which is an example of a product that is considered a need?

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breakfast food

Question 8

Which statement best explains how elasticity and incentives work together?

Revolt · Accepted Answer

An elastic good, such as a game, is more likely to respond to incentives.

Question 9

Tasty Treat Tea is a popular iced tea drink. When the manufacturer begins to use imported tea leaves, the price rises by 10%, and the quantity demanded falls by 20%.The fact that quantity demanded changed by more than the price change suggests that

Revolt · Accepted Answer

The demand for Tasty Treat Tea is elastic.

Question 10

A reward or punishment that encourges people to behave in a certain way is called a(n)

Revolt · Accepted Answer

incentive.

Elasticity and Incentives Answers

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