Question from Past Microeconomics Qualifying ExamEdit
Fall 1999- Section I, Question seven, George Mason University
True, False, Uncertain. Determine whether or not each of the following statements are true or false. Explain your reasoning briefly in a paragraph or two. (The explanation is often more important than the answer given). Include a carefully labeled diagram or game matrix if it helps to clarify your answer.
Every linear supply curve that passes through the axis(P=0 and Q=0) has the same elasticity
The price elasticity of supply is equal to P/Q * 1/slope. Different linear supply curves running through the point (0,0) may have different slopes and therefor different elasticity’s (See Frank p379-381).