Question

1. Which of the following statements is false

Scarcity is the tension between unlimited wants and limited resources

Demand is the quantity of a product or service desired by consumers

Supply is how much of a product or service the market can offer

Total utility is the sum of all satisfaction or benefit that an individual gains from some amount

Elasticity is the degree to which supply or demand reacts to changes in quantity available. (is this correct)

2. The supply curve is upward- sloping because as price increases

So do costs

Consumers demand less

Suppliers can earn higher levels of profit to justify producing more.   (is this correct)

Answer 1

1. The given option is correct.

• Elasticity refers to the response of a goods supply or demand based on the change's in its price.
• It is not based on the changes in quantity available.
• If a goods quantity demanded and quantity supplied changes in respect to price, then it is termed as elasticity.

2. The given option is correct.

• The supply curve is upward sloping because as price increases, suppliers can earn higher levels of profit to justify producing more.
• The upward sloping supply curve reflects the increase in quantity supplied Inorder to increase the price required to cover the production costs.