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Elasticity Of Demand Quiz 3 (25 MCQs)

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1. You are on a committee that is considering ways to raise money for your House's fundraiser. You would recommend increasing the price of raffe tickets only if you thought the demand curve for these tickets was
2. Oil has seen a decrease in demand of 9%, while the price has increased 13%
3. A 5% fall in price of a good results in 10% rise in its demand .Calculate Ed
4. A normal good is defined as a good for which demand increases as:
5. The price decreases from RM2, 000 to RM1, 800. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?
6. When the price of a product rises from $ 10 to $ 15, the demand falls from 5000 to 4000 units. What is the value of the price elasticity of demand for the product?
7. If the cross elasticity of demand is-2:
8. Quantity demanded increase 30% while price decreases 30%; this means that the price elasticity of demand is
9. PED is inelastic and a firm raises its price. What happens to total revenue?
10. Which of the following is not a determinant of PES?
11. Which of the following does not determine demand elasticity?
12. Do higher prices lead to increased revenues for a company?
13. If the elasticity of demand for a commodity is unity, an increase in its price will
14. Price elasticities of demand tend to
15. The graph of a demand curve that is perfectly elastic is:
16. A given percentage change in price leads to a small percentage change in quantity demanded. (Less than 1)
17. The PED of Good A is the degree of responsiveness of quantity demanded of Good A to a change in the _____, ceteris paribus.
18. If income elasticity is .4 what can we assume about this good?
19. What is a reason a product would be elastic?
20. The PED for a product is-0.5. Following a sales promotion demand has risen by 24%. How big was the discount offered to customers?
21. For which type of good would you expect the price elasticity of demand to be highest?
22. Elasticity measures _____
23. If average income rises from $ 18, 000 per year to $ 22, 000 per year and annual gasoline consumption per household rises from 1000 to 1500 gallons, the income elasticity of demand for gas is:
24. If the YED of a good is assessed to be 1.7, the good can be classified as a
25. Red Wing Shoes has seen a decrease in demand of 40%, while the price has increased 20%
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