This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When the supply of a good decreases, equilibrium price stays the same.What is the price elasticity of demand of the good? A) -1. B) Infinite. C) Zero. D) +1. Show Answer Correct Answer: B) Infinite. 2. Imagine a good with a small, positive income elasticity of demand. What type of good is it? A) Inferior, necessary good. B) Normal, luxury good. C) Normal, necessary good. D) Inferior, luxury good. Show Answer Correct Answer: C) Normal, necessary good. 3. An increase or a decrease in quantity demanded due to a change in the relative price of the replacement product A) Marginal utility. B) Substitute effect. C) Income effect. D) Substitute. Show Answer Correct Answer: B) Substitute effect. 4. Which of the following goods is the most price elastic? A) Televisions. B) Cars. C) Shoes. D) Qtips. Show Answer Correct Answer: B) Cars. 5. Which of the following is NOT a determinant for demand elasticity? A) Change in population. B) The environment. C) The availability of substitutes. D) A good's relative importance. Show Answer Correct Answer: B) The environment. 6. What is most likely to make the demand for Good X inelastic? A) The proportion of income spent on Good X is very high. B) Good X is a luxury good. C) There are a large number of substitutes for Good X. D) Good X is habit-forming. Show Answer Correct Answer: D) Good X is habit-forming. 7. Which of the following items would be best described as mostly inelastic? A) Android phone. B) Tim Hortons Coffee. C) Cars. D) Vacation to Hawaii. Show Answer Correct Answer: B) Tim Hortons Coffee. 8. YED = 0 is referring to A) Necessity Goods. B) Normal Goods. C) Luxury Goods. D) Inferior Goods. Show Answer Correct Answer: A) Necessity Goods. 9. The price elasticity of demand for tissues is 0.66. This means the demand for tissues is relatively A) Elastic. B) Unit elastic. C) Inelastic. D) Really expensive. Show Answer Correct Answer: C) Inelastic. 10. A 20% price cut causes a 15% increase in quantity demanded (sales) A) PED =-0.75. B) PED =-1.33. C) PED =-1.75. D) PED =-7.5. Show Answer Correct Answer: A) PED =-0.75. 11. A given percentage change in price leads to a large percentage change in quantity demanded (Greater than 1) A) Elastic Demand. B) Unitary Elastic Demand. C) Inelastic Demand. D) None of above. Show Answer Correct Answer: A) Elastic Demand. 12. A PED value of-1.2 means ..... A) The change in demand is more than the change in price. B) The change in demand is less than the change in price. C) A change in price leads to a proportionate change in demand. D) A change in price causes a complete stop to demand. Show Answer Correct Answer: A) The change in demand is more than the change in price. 13. Question 3Yesterday, the price of envelopes was RM3 a box, and Ahmad was willing to buy 10 boxes. Today, the price has gone up to RM3.75 a box, and Ahmad is now willing to buy 8 boxes. What is Ahmad's elasticity of demand? A) -0.30. B) -0.50. C) -0.80. D) -1.00. Show Answer Correct Answer: C) -0.80. 14. If your salary increase by 30 % and in response you increase your clothing purchases by 20 %, income elasticity equals ..... and clothing is ..... A) 1.5; luxury good. B) 1.5; normal good. C) .67; inferior good. D) 0.67; normal good. Show Answer Correct Answer: D) 0.67; normal good. 15. If Price and Total Revenue are inversely related A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Elastic. 16. People buy less of them when they are well off but more of them during hard times. This describes ..... A) Normal goods. B) Luxury goods. C) Natural goods. D) Inferior goods. Show Answer Correct Answer: D) Inferior goods. 17. What is necessary for consumer surplus to be zero? A) Demand is perfectly elastic. B) Demand is perfectly inelastic. C) Supply is perfectly elastic. D) Supply is perfectly inelastic. Show Answer Correct Answer: A) Demand is perfectly elastic. 18. In which situation is the demand for a product said to be price elastic? A) A fall in price increases expenditure on the product. B) A fall in price increases quantity demanded. C) A rise in price increases expenditure on the product. D) A rise in price reduces quantity demanded. Show Answer Correct Answer: A) A fall in price increases expenditure on the product. 19. Question 10The demand for food is most elastic in countries ..... A) With intermediate income levels. B) With low income levels. C) That are highly urbanized. D) With high income levels. Show Answer Correct Answer: B) With low income levels. 20. PED is-1.5 and the firm raises price by 4%. What happens to total revenue? A) Total revenue stays the same. B) Total revenue decreases by 4%. C) Total revenue increases. D) Total revenue decreases. Show Answer Correct Answer: D) Total revenue decreases. 21. A consumer spends Rs 250 on a good when its price is Rs 5 per unit. When the price rises to Rs 6 per unit he spends Rs 240 .Calculate Rs Ed A) -3. B) -1. C) -4. D) -2. Show Answer Correct Answer: B) -1. 22. The income elasticity of demand for a normal good is always what? A) Positive/greater than 1. B) Positive/greater than 0. C) Negative/less than 1. D) Negative/less than 0. Show Answer Correct Answer: B) Positive/greater than 0. 23. A good has a unitary price elasticity of demand and at a price of $ 20 a firm sells 40 000 units.How many will the firm sell if it charges a price of $ 5? A) 160 000. B) 100 000. C) 200 000. D) 10 000. Show Answer Correct Answer: A) 160 000. 24. How many categories of YED exits? A) One. B) Three. C) Five. D) Four. Show Answer Correct Answer: D) Four. 25. The Law of Demand "works" because of a combination of what two effects? A) Substitution and Income Effects. B) Doppler and Lake Effects. C) The Ability and Desire Effect. D) The Substitution and Elasticity Effect. Show Answer Correct Answer: A) Substitution and Income Effects. 26. The formula for price elasticity of demand is ..... A) % change in price / % change in income. B) % change in Price / % change in Qd. C) Change in quantity / Change in price. D) % change in Qd / % change in Price. Show Answer Correct Answer: D) % change in Qd / % change in Price. 27. Wheat has seen a decrease in demand of 5%, while the price has increased 7%. The PED is: A) 1.4 inelastic. B) .71 inelastic. C) 1.4 elastic. D) .71 elastic. Show Answer Correct Answer: B) .71 inelastic. 28. The price elasticity of demand generally tends to be: A) Smaller in the long run than in the short run. B) Smaller in the short run than in the long run. C) Larger in the short run than in the long run. D) Unrelated to the length of time. Show Answer Correct Answer: B) Smaller in the short run than in the long run. 29. Assume a pizza costs $ 10. When the price increases to $ 12, demand falls 10%. What is the own-price elasticity of demand? Note:in economics, elasticity is generally reported as a positive number even when it is negative. A) .5. B) .2. C) 5. D) 2. Show Answer Correct Answer: A) .5. 30. A company sells solar batteries. Last year income rose by 2% as a result demand increased from 1.6million units to 1.8 million. What is the YED? A) -6.6. B) 6.25. C) 4.3. D) 5.2. Show Answer Correct Answer: B) 6.25. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesElasticity Of Demand Quiz 1Elasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity Of Demand Quiz 4Elasticity 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