Chapter 4

Question 1

Factors affecting PES

Answer 1

T - Time period
I - Level of stocks and inventories
M - Mobility and substitutability of FOPs
S - Spare capacity of firms
C - Complexity of production process

Question 1

Factors affecting PED

Answer 1

H - Habit of the consumer
I - Proportion of income spent on the good
N - Degree of necessity to consumers
T - Time period
S - Number and closeness of substitutes

Question 2

Factors affecting XED

Answer 2

R - Relationship between goods

Question 3

Factors affecting YED

Answer 3

N - Nature of goods
L - Level of income

Question 4

Factors affecting LD

Answer 4

G - Government policies
O - Change in price of factor inputs
T - Technology
P - Productivity of labor
P - Changes in production of goods and services

Question 5

Factors affecting LS

Answer 5

S - Changes in size and composition of qualified workers
G - Government policies
L - Changes in labour force

Question 6

Factors affecting WED

Answer 6

S - Availability of substitutes
P - Proportion of labour cost in total cost
PED -PED for final good or service

Question 7

Factors affecting WES

Answer 7

S - Skills and educational level
T - Time period