Question

17. A computed value of Es = -2.31 indicates the following: a. Electricity of Supply is Inelastic b. Elasticity of Supply is Elastic C. Elasticity of Demand is Unit Elastic d. Elasticity Cannot be Determined e. None of the Above 18. When tasks are delegated from one group of people to another group of people (or team, conflicts often arise. In the world of economics, these conflicts are referred to as: a. Special-Interest Effect b. Government Failure c. Chronic Deficit d. Market Failure e. Principal - Agent Problem

Answer 1

Option B is correct. Elasticity value is negative but it is greater than 0 in absolute terms. this implies that for any given percentage change in price the quantity supplied is going to increase by a greater percentage. This makes the supply elastic

Option E is correct. There is a principal who can be any employer that delegate tasks to an agent that can be a worker. conflict of interest arises because principal wants the agent to maximize his efforts while the aim of agent is to maximize his reward.