This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If goods are complements, definitely their A) Cross elasticities are positive. B) Income elasticities are positive. C) Cross elasticities are negative. D) Income elasticities are negative. Show Answer Correct Answer: C) Cross elasticities are negative. 2. If percentage change on quantity demanded is +29% and the percentage change in income is +11%. What is income elasticity of demand? A) 2.73. B) 0.263. C) 2.63. D) 0.38. Show Answer Correct Answer: C) 2.63. 3. Price elasticity of demand is (-) 1.5 At a given price the consumer buys 40 units of the good. How many units will the consumer buy if the price falls by 20 % A) 56. B) 50. C) 52. D) 54. Show Answer Correct Answer: C) 52. 4. If the elasticity of demand for a product equals 1.5, then an increase in the product price will cause total revenue to A) Decrease. B) Increase. C) Remain the same. D) None of above. Show Answer Correct Answer: A) Decrease. 5. The quantity demanded of a commodity falls by 5 units when its price rises by Re 1 per unit. If price elasticity of demand is (-) 1.5 Calculate the price before change if at this price quantity demanded was 60 units. A) 18. B) 30. C) 20. D) 29. Show Answer Correct Answer: A) 18. 6. The price of rice has increased by 10%. What is the likely percentage change in quantity demanded? A) Fall by 12%. B) Fall by 5%. C) Fall by 10%. D) Fall by 20%. Show Answer Correct Answer: B) Fall by 5%. 7. The Price elasticity of soda is-0.8, therefore we can say that soda is ..... A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: B) Inelastic. 8. If PED of a good is 0.4, we say that demand for the good is A) Unitary price elastic. B) Price elastic. C) Price inelastic. D) Perfectly price elastic. Show Answer Correct Answer: C) Price inelastic. 9. Price Elasticity of Demand is calculated by A) % change in Quantity Demanded divided by % change in % change in Price. B) % change in Price divided by % change in Quantity Demanded. C) Price divided by Total Revenue. D) Total Revenue divided by Price. Show Answer Correct Answer: A) % change in Quantity Demanded divided by % change in % change in Price. 10. Change in quantity demanded due to a change in price that alters a consumers real income A) Income effect. B) Total expenditures. C) Inelastic. D) Elasticity. Show Answer Correct Answer: A) Income effect. 11. Yuna said, 'I go ice skating five times a week. If the ticket price doubles, I will go only four times a week.'Yuna's demand for ice skating is A) Inelastic. B) Elastic. C) Perfectly inelastic. D) Unitarily elastic. Show Answer Correct Answer: A) Inelastic. 12. Elasticity under percent under 0 A) Subsitute. B) Market size. C) Future expectations. D) Complementary. Show Answer Correct Answer: D) Complementary. 13. How is PED calculated? A) Change in price / change in quantity. B) Percentage change in price / percentage change in quantity. C) Change in quantity / change in price. D) Percentage change in quantity / percentage change in price. Show Answer Correct Answer: D) Percentage change in quantity / percentage change in price. 14. A decline in the price of good X by Rs 5 cause an increase of 20 units on its demand which goes up to 50 units. The new price is Rs 15 .Calculate Ed A) $-\frac{7}{3}$. B) $-\frac{5}{3}$. C) $-\frac{9}{3}$. D) $-\frac{8}{3}$. Show Answer Correct Answer: D) $-\frac{8}{3}$. 15. Cross elasticity of demand is ..... A) Positive for inferior goods. B) Negative for substitute goods. C) Unitary for inferior goods. D) Negative for complementary goods. Show Answer Correct Answer: D) Negative for complementary goods. 16. Price elasticity of demand that has a coefficient of >1 A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Elastic. 17. Which of the following would be an inelastic good or service? A) Gasoline. B) Vacation to Spain. C) Nike Shoes. D) Headphones. Show Answer Correct Answer: A) Gasoline. 18. A 5% rise the price of beef decreased quantity of beef demanded by 10% and increase the quantity demanded of chicken by 15%(i) Calculate the cross elasticity of demand between beef and chicken A) 1/2. B) 3. C) 2. D) 1/3. Show Answer Correct Answer: B) 3. 19. The demand curve for new cars in a country shifted to the left.Which change could have caused such a shift? A) An increase in real disposable income. B) An increase in the price of train travel. C) An increase in the price of new cars. D) An increase in the cost of borrowing. Show Answer Correct Answer: D) An increase in the cost of borrowing. 20. If the demand is perfectly elastic, then a shift in the supply curve does not affect the equilibrium price. A) True. B) False. C) Uncertain. D) None of above. Show Answer Correct Answer: A) True. 21. Area of economics that deals with behaviors and decision making of units A) Microeconomics. B) Demand curve. C) Demand. D) Marginal utility. Show Answer Correct Answer: A) Microeconomics. 22. Shows how sensitive consumer demand is to changes in price A) Price elasticity of demand. B) Price elasticity of supply. C) Income elasticity. D) Consumer surplus. Show Answer Correct Answer: A) Price elasticity of demand. 23. If income rises by 12% and demand rises by 20%, what is the YED? A) 0.92. B) 1.67. C) 0.6. D) 1.97. Show Answer Correct Answer: B) 1.67. 24. Alyssa's Floral Shoppe dropped its prices for a dozen roses from £45 to £35 this year. Because of this decrease in price, the quantity sold increased from 1000 to 1500. The price elasticity of demand for Alyssa's roses is: A) 2.25. B) 1.6. C) 0.625. D) 1.00. Show Answer Correct Answer: B) 1.6. 25. Suppose that when paper plates sell for $ 2 per package, the demand is 5 million. Which of the following is the total revenue earned? A) $ 7 million. B) $ 10 million. C) $ 1 million. D) $ 3 million. Show Answer Correct Answer: B) $ 10 million. 26. If a 1 percent decrease in the price of a pound of squash results in a larger percentage decrease in the quantity supplied, A) Demand is inelastic. B) Demand is elastic. C) Supply is inelastic. D) Supply is elastic. Show Answer Correct Answer: D) Supply is elastic. 27. If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of a good, demand is: A) Relatively inelastic. B) Relatively elastic. C) Perfectly elastic. D) Perfectly inelastic. Show Answer Correct Answer: B) Relatively elastic. 28. For much of the world rice is a staple food. If the world price of rice increases by 10%, what is the likely percentage change in quantity demanded? A) Fall by 12%. B) Fall by 5%. C) Fall by 10%. D) Fall by 20%. Show Answer Correct Answer: B) Fall by 5%. 29. What is the definition for income elasticity of demand? A) The resposiveness of demand to a change in price. B) The responsiveness of demand to a change in income. C) The un-resposiveness of demand to a change in price. D) The un-responsiveness of demand to a change in income. Show Answer Correct Answer: B) The responsiveness of demand to a change in income. 30. Result is positive and over 1 A) Normal Good. B) Inferior Good. C) Luxury Good. D) None of above. Show Answer Correct Answer: C) Luxury Good. 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