This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the income elasticity is 0.6 and income increases by 10%, what would the demand increasse by? A) 8. B) 24. C) 19. D) 6. Show Answer Correct Answer: D) 6. 2. A consumer buys 100 units of good X at rs 5 per unit. The elasticity is (-)2. At what price will he be willing to buy 140 units of good X? A) 3. B) 2. C) 1. D) 4. Show Answer Correct Answer: D) 4. 3. Result is positive and under 1 A) Normal Good. B) Inferior Good. C) Luxury Good. D) None of above. Show Answer Correct Answer: A) Normal Good. 4. When will demand for Inferior goods rise? A) During a recession. B) When wages rise more slowly than the price of products. C) When unemployment is high. D) All of these. Show Answer Correct Answer: D) All of these. 5. The medication known as insulin has seen a decrease in demand of 2%, while the price has increased 10% A) .2 elastic. B) .2 inelastic. C) 5 elastic. D) 5 inelastic. Show Answer Correct Answer: B) .2 inelastic. 6. Some factors that affect price elasticity are ..... A) The number of subtitutes and how dependant you are on the good. B) The number of customers and producers of the good. C) How dependant you are and the quality of the good. D) None of above. Show Answer Correct Answer: A) The number of subtitutes and how dependant you are on the good. 7. Which of the following products would likely have an inelastic demand? A) Nike's Air Force One trainers. B) Fizzy cola, a carbonated soda. C) A car repair. D) A meal at an expensive steak house. Show Answer Correct Answer: C) A car repair. 8. A company sells solar batteries. Last year income rose by 2% as a result demand increased from 1.6million units to 1.8 million. The product is a/an ..... product A) Inferior. B) Normal. C) Luxury. D) None of these. Show Answer Correct Answer: C) Luxury. 9. If Total Revenue does not change when Price changes A) Unit elastic. B) Elastic. C) Inelastic. D) None of above. Show Answer Correct Answer: A) Unit elastic. 10. What word describes demand as been very sensitive to a change in price? A) Inelastic. B) Elastic. C) Unitary elastic. D) None of above. Show Answer Correct Answer: B) Elastic. 11. The elasticity of demand for tissues is less than 1. This means the demand for tissues is A) Elastic. B) Unit elastic. C) Inelastic. D) Really expensive. Show Answer Correct Answer: C) Inelastic. 12. To determine whether two goods are substitutes or complements, an economist would estimate the A) Price elasticity of demand. B) Income elasticity of demand. C) Price elasticity of supply. D) Cross-elasticity of demand. Show Answer Correct Answer: D) Cross-elasticity of demand. 13. A PED value greater than 1 means ..... A) The good is perfectly price elastic. B) The good is price elastic. C) The good is unitary elastic. D) The good is price inelastic. Show Answer Correct Answer: B) The good is price elastic. 14. What can we interpret about price elasticity of demand when the percentage change in quantity demanded is equivalent to the percentage change in price? A) The product is inelastic. B) The product is perfectly inelastic. C) The product is elastic. D) The product is unit elastic. Show Answer Correct Answer: D) The product is unit elastic. 15. Since the elasticity of demand is downward sloping the elasticity should always be negative. A) True. B) False. C) Information not given. D) None of above. Show Answer Correct Answer: A) True. 16. % Change in Quantity Demanded of Product C / % Change in Quantity Demanded of Product X.The above equation gives rise to: A) Income Elasticity of Demand. B) Cross Elasticity of Demand. C) Price Elasticity of Demand. D) None of above. Show Answer Correct Answer: B) Cross Elasticity of Demand. 17. What is the formula for YED? A) Percentage change in quantity of good A / Percentage change in price of good B. B) Percentage change in QD / Percentage change in Income. C) New-Old / Old X 100. D) Percentage change in quantity / Percentage change in price. Show Answer Correct Answer: B) Percentage change in QD / Percentage change in Income. 18. The income elasticity of demand is a measure of the: A) Relative responsiveness of quantity demanded to changes in income. B) Absolute change in demand yielded by an absolute change in income. C) Slope of the income-consumption curve. D) Negative slope of a market demand curve. Show Answer Correct Answer: A) Relative responsiveness of quantity demanded to changes in income. 19. Which of the following is NOT an inelastic demand for a product? A) An elasticity of 0. B) An elasticity of 1.5. C) An elasticity of 0.95. D) An elasticity of 0.7. Show Answer Correct Answer: B) An elasticity of 1.5. 20. If P = £10 for Tiny Tee-shirts, Q = 20, but if P falls to £5, Q demanded increase to 25. The price elasticity of demand for Tiny Tee-shirts is: A) 1/2. B) 1/3. C) 3.0. D) 21. Show Answer Correct Answer: A) 1/2. 21. When price of a good is RS 13 per unit the consumer buys 11 units of that good .when price rises to Rs 15 per unit, the consumer continues to buy 11 units. Calculate price elasticity of demand. A) -2. B) 0. C) -1. D) -3. Show Answer Correct Answer: B) 0. 22. Electricity is a good with few or no close substitutes. What would you expect about the price elasticity of demand for electricity? A) Perfectly inelastic. B) Relatively inelastic. C) Perfectly elastic. D) Relatively elastic. Show Answer Correct Answer: B) Relatively inelastic. 23. If the cross elasticity of demand between goods A and B is positive, A) The demands for A and B are both price elastic. B) A and B are complements. C) A and B are substitutes. D) The demands for A and B are both price inelastic. Show Answer Correct Answer: C) A and B are substitutes. 24. The Elasticity of Demand refers to A) Responsiveness of price to a change in demand. B) Responsiveness of supply to a change in price. C) Responsiveness of demand to a change in price. D) Responsiveness of price to a change in supply. Show Answer Correct Answer: C) Responsiveness of demand to a change in price. 25. Suppose demand for a product is highly elastic. What will likely happen to a company's total revenue if it raises the price of that product? A) Total revenue will rise. B) Total revenue will fall. C) Total revenue will remain the same. D) Total revenue will fluctuate. Show Answer Correct Answer: B) Total revenue will fall. 26. The elasticity of demand is always ..... A) Less than 1. B) Positive. C) Negative. D) Greater than 1. Show Answer Correct Answer: C) Negative. 27. If elasticity of demand is 0 A) Perfectly inelastic demand. B) Perfectly inelastic supply. C) Perfectly elastic demand. D) Perfectly elastic supply. Show Answer Correct Answer: A) Perfectly inelastic demand. 28. If prices falls and producer revenue falls then demand is A) Inelastic. B) Unitary. C) Elastic. D) None of above. Show Answer Correct Answer: A) Inelastic. 29. How a change in income affects the quantity demanded for a product. A) Income elasticity of demand. B) Elasticity of supply. C) Total revenue. D) Consumer surplus. Show Answer Correct Answer: A) Income elasticity of demand. 30. If the income elasticity <1 what type of good is it? A) Inferior. B) Elastic. C) Inelastic. D) Complementary. Show Answer Correct Answer: C) Inelastic. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesElasticity Of Demand Quiz 1Elasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity Of Demand Quiz 5Elasticity Of Demand Quiz 6Elasticity Of Demand Quiz 7Elasticity Of Demand Quiz 8Elasticity Of Demand Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books