if export supply is inelastic, it means exporters can change their production __when world prices change....

if export supply is inelastic, it means exporters can change their production __when world prices change.

A. a little B. by a fixed percentage C.by a fixed amount D. a lot

Solutions

Expert Solution

Inelastic export supply means that export supply elasticity is less than 1 .

This means that

Percentage change in export supply / Percentage change in World Price < 1

This means that , Percentage change in export supply < Percentage change in World Price .

So this means that when a percentage change in world price happens , then percentage change in export supply is less than or little as compared to percentage change in world price .

Hence (A) part is a correct answer

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

An inelastic supply increases. Compare the size of the changes in prices and quantities with the...

An inelastic supply increases. Compare the size of the changes in prices and quantities with the size of those changes that would occur the same increase in an elastic supply. The effects of an increase in an inelastic supply will be: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a a larger change in equilibrium quantity and a larger change in equilibrium price. b a larger change in equilibrium quantity and...

What is the effect of the export ban on domestic prices, domestic demand and supply, consumer...

What is the effect of the export ban on domestic prices, domestic demand and supply, consumer surplus, producer surplus and total welfare in exporting country? Explain with help pf demand and supply curve.

Q24 - The supply curve will be more inelastic when 1. Inputs to production are scarce....

Q24 - The supply curve will be more inelastic when 1. Inputs to production are scarce. 2. Firms' response to a price change is limited by the limited capacity of their production facilities. 3. A good has many substitutes. 4. The firm is experiencing diminishing returns to a variable input. Q25 - A perfectly competitive market is one where 1. Each firm controls the price charged for its product by changing the quantity they produce . 2. Each firm sells...

The collapse of the world oil prices is a beneficial supply shock to the U.S. petrochemical...

The collapse of the world oil prices is a beneficial supply shock to the U.S. petrochemical and many other U.S. industries. What happens? a. more petrochemicals will be sold b. petrochemical prices will decline c. the U.S. Aggregate Supply curve will shift right d. all of the above

What will happen to equilibrium prices if both demand and supply change in opposite directions in...

What will happen to equilibrium prices if both demand and supply change in opposite directions in a market simultaneously by the same proportions at all price/quantity combinations? How are the vacancy rate and the occupancy rate in a market related?

Bond prices can fall either because of a change in the general level of interest rates...

Bond prices can fall either because of a change in the general level of interest rates or because of an increased risk of default or a change in the real rate of return (otherwise known as opportunity cost of capital). To what extent do floating-rate bonds and puttable bonds protect the investor against each of these risks? Be sure to support your statements with logic and argument

No country in the world can produce unlimited number of the goods, the production of goods...

No country in the world can produce unlimited number of the goods, the production of goods will be depending on various combination of the factors of production. Based on your opinion, why unemployment occurs in a nation. please add examples

How can you explain using the economic tools the shocking drop of the world oil prices?...

How can you explain using the economic tools the shocking drop of the world oil prices? What are your expectations concerning the effect of the drop in oil prices on the following: Oil exporting countries. Oil importing countries. The relative importance of non-oil substitutes. The environmental damage (degradation).

How can prices change constantly in an efficient market? A. New information changes expected and/or required...

How can prices change constantly in an efficient market? A. New information changes expected and/or required returns requiring traders to buy or sell B. Traders receive information at different times so their trades cause prices to fluctuate C. In an efficient market there are enough traders that everyone has a different idea of what the correct price is, so the price is always moving D. Prices can't change constantly if a market is efficient

what are the three tools the central bank can use to change the money supply? describe...

what are the three tools the central bank can use to change the money supply? describe how the central bank can use each of these tools to either increase or decrease the money supply.

Subjects