Question

Goods that can be produced using rare productive resources have a _____ elasticity of supply. The greater the amount of time available after a price change, the _____ is the elasticity of supply.

A) high; more inelastic
B) low; smaller
C) high; greater
D) low; greater
E) high; smaller

Answer 1

The answer is D) low; greater. Rare productive resources lead to low elasticity of supply, while more time after a price change increases the elasticity of supply.

Step-by-step explanation:

Goods that can be produced using rare productive resources typically have a low elasticity of supply because they are less responsive to price changes due to the scarcity of resources. Over time, after a price change, the elasticity of supply generally becomes greater as producers have more time to adjust their production processes, source alternative inputs, or increase capacity, which makes the supply more responsive to price changes.

Thus, the correct answer to the student's question is:

• Goods that can be produced using rare productive resources have a low elasticity of supply. The greater the amount of time available after a price change, the greater is the elasticity of supply.

Therefore, the answer would be D) low; greater.