The Crunching Numbers
A boutique pottery shop increases mug prices by 15%, causing its quantity supplied to rise by 30%. What is the firm's Price Elasticity of Supply (PES), and is its supply elastic or inelastic?
What is PES = 2 elastic
A plastic bottle factory is running at only 40% operating capacity when bottle prices jump. Which elasticity factor explains why they can immediately flood the market with more output?
What is spare (unused) capacity?
In general, why does a laptop manufacturer have a higher PES than a wheat farmer when market prices rise?
What is because laptops are manufactured goods (which can be produced year-round and stored as stock), whereas wheat is a primary commodity limited by growing seasons?
An authentic 19th-century painting is up for auction. Regardless of how high bids go, no additional original paintings can ever be supplied. What is its exact PES value?
PES=0
What is the name of the literary device that compares two unlike things using the words "like" or "as"?
similie
A stadium host raises concert ticket prices by 25%, but due to fixed seating capacity, the available seats supplied cannot increase at all. What is the venue's PES?
What is PES = 0 (Perfectly Inelastic)?
A textile factory can switch its machines from sewing winter coats to producing summer swimsuits within a single afternoon. Which determinant gives this business high PES?
What is mobility of factors of production?
Lithium mining companies struggle to quickly ramp up output when electric car battery prices jump. What category of good is lithium, and why is its PES inherently low?
What is a primary commodity, which requires substantial time and capital investments to extract?
If you plot a supply curve for a good with perfectly inelastic supply on a standard Price vs. Quantity graph, what shape does the line take?
vertical
What movie features the line "Here's Johnny!"?
the shining
A custom shoe manufacturer raises shoe prices from $50 to $150, causing quantity supplied to increase from 100 pairs to 300 pairs. Using the midpoint formula, what is the numerical PES, and what type of elasticity is this?
What is PES = 1 (Unit Elastic)?
A fresh strawberry farm struggles to react quickly to price spikes because its berries spoil within days without expensive refrigeration. Which determinant makes their short-run supply inelastic?
What is the ability (or inability) to store stocks?
Between a facility producing canned baked beans and a bakery crafting custom wedding cakes, which producer has a higher PES and why?
What is canned baked beans, because they can easily be stored as stock for long periods?
If a firm's percentage change in quantity supplied perfectly matches its percentage change in price, what specific term defines its PES?
What is unit elastic supply
What is the art form of precisely folding paper into shapes and animals?
origami
An artisan bakery notices that a 12% price hike for sourdough leads to an 8% increase in loaves baked. What is the baker's numerical PES, rounded to two decimal places?
.67 inelastic
A tech manufacturer wants to double its output of graphics cards, but acquiring extra rare minerals causes its production cost per extra unit to skyrocket. How does this rapid cost increase affect their supply elasticity?
It makes the supply inelastic.
A sudden frost destroys Florida orange groves, causing orange prices to soar. Why are orange growers unable to respond immediately despite high prices?
What is because agricultural crops require a new planting season and long growing time to increase production?
At a competitive commodity exchange, buyers can purchase any quantity of raw timber at $10 per unit, but supply drops to zero if the price falls below $10. What elasticity value does this horizontal supply curve represent?
What is perfectly elastic supply
What board game was originally called "Criss-Cross Words"?
scrabble
If a local coffee shop operates with a PES of 1.5 for lattes and market prices increase by 8%, by what percentage will the shop increase its quantity supplied?
What is a 12% increase in quantity supplied?
When crude oil prices double overnight, oil companies cannot instantly increase output, but after 5 years of developing offshore rigs, they increase supply significantly. Which core determinant causes supply to shift from inelastic to elastic over time?
What is the length of time?
Compare a software firm selling digital downloads to a gold mining firm. Why does the software firm have near-infinite elasticity compared to the mine?
Digital goods have unlimited spare capacity and extra units can be replicated at almost zero additional cost
If a seller experiences a situation where $\% \Delta Q_s < \% \Delta P$, into what numerical range does its PES fall?
What is between 0 and 1
What is the art of making designs or patterns on fabric using a needle and thread?
Embroidery