This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The formula for the price elasticity of demand uses which of the following in the denominator? A) The average price of the product. B) The quantity demanded for the product. C) The percentage of change in the price of the product. D) The change in the quantity demanded. Show Answer Correct Answer: C) The percentage of change in the price of the product. 2. To determine elasticity of demand economist use a ..... A) Chart. B) Formula. C) None of the above. D) None of above. Show Answer Correct Answer: B) Formula. 3. A price cut from $ 2 to $ 1.50 causes the demand for peas to rise from 10.000 units to 11.500 units. What is the price elasticity of demand for peas? A) -3, 0. B) +0, 6. C) -0, 6. D) +3, 0. Show Answer Correct Answer: C) -0, 6. 4. Electricity has seen a decrease in demand of 14%, while the price has increased 18% A) 1.3 inelastic. B) .78 elastic. C) .78 inelastic. D) 1.3 elastic. Show Answer Correct Answer: C) .78 inelastic. 5. Describe your demand for medicine if you buy the same amount of it after a large price increase. A) Elastic. B) Unitary elastic. C) Perfectly inelastic. D) Hyper elastic. Show Answer Correct Answer: C) Perfectly inelastic. 6. If a rise in the price of good 1 decreases the quantity of good 2 demanded, A) The cross elasticity of demand is negative. B) Good 1 is an inferior good. C) Good 2 is an inferior good. D) The cross elasticity of demand is positive. Show Answer Correct Answer: A) The cross elasticity of demand is negative. 7. The cross-elasticity of demand for good X with respect to good Y is-0.5.What can be concluded from this? A) Goods X and Y are complementary goods. B) Goods X and Y are substitute goods. C) Good X is an inferior good. D) Good Y is an inferior good. Show Answer Correct Answer: A) Goods X and Y are complementary goods. 8. If the price elasticity of supply is 0.2, and a price increase led to a 3% increase in quantity supplied, then the price increase is about A) 0.07%. B) 0.60%. C) 15%. D) 6%. Show Answer Correct Answer: C) 15%. 9. Price elasticity of demand is (-)2.The consumer buys certain quantity of this good at a price of Rs 10.When the price falls he buys 40 percent more quantity .What is the new price? A) 8. B) 6. C) 4. D) 2. Show Answer Correct Answer: A) 8. 10. A given percentage change in price leads to an equal percentage change in quantity demanded. (Equal to 1) A) Elastic Demand. B) Unitary Elastic Demand. C) Inelastic Demand. D) None of above. Show Answer Correct Answer: B) Unitary Elastic Demand. 11. Of the following, which one is most likely to have a negative income elasticity of demand? A) Used clothes. B) Shoes. C) Hand phone. D) Rice. Show Answer Correct Answer: A) Used clothes. 12. The price of ice cream increased from $ 2.00 to $ 2.20 and the quantity demanded decreased from 10 to 8 units per hour. Note:in economics, elasticity is generally reported as a positive number even when it is negative. Use the midpoint formula. A) 4. B) 3.1. C) 2.3. D) .1. Show Answer Correct Answer: C) 2.3. 13. The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will they be now? A) 5500. B) 7000. C) 3000. D) 4500. Show Answer Correct Answer: B) 7000. 14. Elasticity of demand is said to be elastic when elasticity is: A) Equal to 1. B) Greater than 1. C) Less than 1. D) Greater than 0. Show Answer Correct Answer: D) Greater than 0. 15. The reason why Chevrolet cars are very elastic is because ..... A) They can be easily replaced by other cars. B) No matter the price, people will always choose chevrolet. C) Infomation not given. D) None of above. Show Answer Correct Answer: A) They can be easily replaced by other cars. 16. If cross price elasticity of of good a and good b is-2. What does this mean about good a and b? A) They are substitutes. B) They are inferior goods. C) They are complements. D) They are not related. Show Answer Correct Answer: C) They are complements. 17. When will it not be possible to use price as a rationing mechanism? A) When a good has a number of close substitutes. B) When a good is an inferior good. C) When the demand for a good is infinitely inelastic. D) When the quantity of a good is in fixed supply. Show Answer Correct Answer: C) When the demand for a good is infinitely inelastic. 18. What measures demand elasticity? A) Inverse Demand Theory. B) Total Revenue Test. C) Equilibrium Price Test. D) Demand Coefficient Formula. Show Answer Correct Answer: B) Total Revenue Test. 19. Measurement of degree of responsiveness of quantity demanded to changes in price is called A) Income elasticity of demand. B) Price elasticity of demand. C) Law of demand. D) Cross elasticity of demand. Show Answer Correct Answer: B) Price elasticity of demand. 20. Which of these is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home? A) The demand curve shifts to the left. B) The demand curve becomes flatter. C) The demand curve shifts to the right. D) The demand curve becomes steeper. Show Answer Correct Answer: A) The demand curve shifts to the left. 21. The difference between the highest price a consumer will pay and the actual price paid for a good or service. A) Consumer surplus. B) Elasticity. C) Producer Surplus. D) Deadweight loss. Show Answer Correct Answer: A) Consumer surplus. 22. A producer has a good which PED is assessed to be 1.7. If he wishes to increase total revenue, what should the producer do? A) Increase price. B) Keep price the same. C) Decrease price. D) None of the above. Show Answer Correct Answer: C) Decrease price. 23. If P = $ 10 for Tiny Tee-shirts, Q = 20, but if P = $ 5, Q = 25. The price elasticity of demand for Tiny Tee-shirts is: A) 21. B) 1/2. C) 3.0. D) 1/3. Show Answer Correct Answer: D) 1/3. 24. If P = $ 10 for Tiny Tee-shirts, Q = 20, but if P = $ 5, Q = 25. This good is ..... A) Elastic. B) Unit Elastic. C) Inelastic. D) None of above. Show Answer Correct Answer: C) Inelastic. 25. You are on a committe that is considering ways to raise money for your city's symphony program. You would recommend increasing the price of symphony tickets only if you thought the demand curve for these tickets was A) Inelastic. B) Unit Elastic. C) Perfectly Elastic. D) Elastic. Show Answer Correct Answer: A) Inelastic. 26. If the XED between 2 goods is positive, what is the relationship between these 2 goods? A) Factor Inputs. B) Substitutes. C) No relationship. D) Complements. Show Answer Correct Answer: B) Substitutes. 27. Bonus:The loss of total surplus when a market fails to reach a competitive equilibrium due to a market distortion, like a tax. A) Deadweight loss. B) The law of producer distortion. C) Consumer surplus loss. D) Criss Angel Effect. Show Answer Correct Answer: A) Deadweight loss. 28. If a change in the supply of a good results in a percentage change in quantity demanded that exceeds in absolute value the percentage change in price, then demand is relatively: A) Price elastic. B) Inferior. C) Normal. D) Price inelastic. Show Answer Correct Answer: A) Price elastic. 29. In the short run, price elasticity may be, because of a lack of substitutes for example, relatively A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: B) Inelastic. 30. If the price elasticity of demand for a product is 2.5 and its price has increased by 3%, we can conclude that the quantity demanded: A) Increased by 7.5%. B) Decreased by 3%. C) Decreased by 7.5%. D) Increased by 2.5%. Show Answer Correct Answer: C) Decreased by 7.5%. ← PreviousNext →Related QuizzesMicroeconomics QuizzesEconomics QuizzesElasticity Of Demand Quiz 1Elasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity Of Demand Quiz 4Elasticity Of Demand Quiz 5Elasticity Of Demand Quiz 7Elasticity Of Demand Quiz 8Elasticity Of Demand Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books