This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If a seller knows that the demand for his good or service is inelastic, then what would they most likely do? A) Increase the price. B) Keep the price the same. C) Decrease the price. D) Try to make their product elastic. Show Answer Correct Answer: A) Increase the price. 2. Which one of the following effects on elasticity is the odd one out? A) If a product/service is a necessity. B) None addictive. C) If a product/service has no substitutes. D) If a product/service has good brand image. Show Answer Correct Answer: B) None addictive. 3. The price of a commodity is Rs 15 per unit and its quantity demanded is 500 units. Its quantity demanded rises by 80 units as a result of a fall in its price by 20 %.Calculate Ed A) -0.8. B) -1. C) -0.5. D) -0.6. Show Answer Correct Answer: A) -0.8. 4. What does the elasticity of demand measures? A) How the changes in prices affect global economy. B) How customers react to changes in prices. C) How customers react to changes in quality. D) None of above. Show Answer Correct Answer: B) How customers react to changes in prices. 5. The amount that consumers spend on a product at a particular price A) Marginal utility. B) Demand. C) Total expenditures. D) None of above. Show Answer Correct Answer: C) Total expenditures. 6. What is most likely to increase the demand for compact disc players? A) A fall in disposable incomes. B) A fall in the price of cinema tickets. C) A fall in the price of compact discs. D) A fall in the price of video recorders. Show Answer Correct Answer: C) A fall in the price of compact discs. 7. A good is considered relatively inelastic if the elasticity of demand is ..... A) Less than 1. B) 0. C) Equal to 1. D) Greater than 1. Show Answer Correct Answer: A) Less than 1. 8. It is reasonable to expect the cross price elasticity of demand for golf clubs and golf balls to be positive A) True. B) False. C) Uncertain. D) None of above. Show Answer Correct Answer: B) False. 9. Good X is a substitute for good Y and a complement to good Z. What would happen after a fall in the price of good X? A) Only the demand for X will rise. B) Demand for X, Y and Z will rise. C) Demand for Y will fall and for Z will rise. D) Demand for Y will rise and for Z will fall. Show Answer Correct Answer: C) Demand for Y will fall and for Z will rise. 10. What type of good would have a YED = 2 A) Luxury. B) Necessity. C) Inferior. D) None of above. Show Answer Correct Answer: A) Luxury. 11. A product has perfectly inelastic price elasticity of demand. What will happen to total revenue if the price of the product rises by 10%? A) It will fall by 10%. B) It will fall to zero. C) It will remain unchanged. D) It will rise by 10%. Show Answer Correct Answer: D) It will rise by 10%. 12. Which of the following scenarios would indicate inelastic demand with respect to price? A) Price falls 5% demand rises 3%. B) Price rises 5% and demand rises 3%. C) Price falls 5% and demand rises 10%. D) Price rises 5% and demand rises 10%. Show Answer Correct Answer: A) Price falls 5% demand rises 3%. 13. When the quantity demanded changes by a smaller percentage than the price, demand is said to be A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: B) Inelastic. 14. An increase in Azad's income decreases her demand for cassette tapes. For her, cassette tapes are A) A complement to any good. B) An inferior good. C) A substitute good. D) A normal good. Show Answer Correct Answer: B) An inferior good. 15. Question 5A cut in price of Product A from RM1.50 to RM1.20 sees demand for a product rise by 10%. What would the price elasticity of demand be for this product? A) 3.00. B) 1.00. C) -0.50. D) 2.00. Show Answer Correct Answer: C) -0.50. 16. If price elasticity of demand coefficient ratio is 3, demand is A) Relatively elastic. B) Relatively inelastic. C) Perfectly elastic. D) Perfectly inelastic. Show Answer Correct Answer: A) Relatively elastic. 17. A consumer buys 10 units of good x at a price of Rs 5 per unit. The price elasticity of demand for this demand for this good is 2 . Price falls to Rs 4 per unit. How many units of good X will he now buy at this price? A) 15. B) 17. C) 16. D) 14. Show Answer Correct Answer: D) 14. 18. Suppose there is a 6% increase in the price of good X and a resulting 6% decrease in the quantity of X demanded. Price elasticity of demand for X is A) 36. B) 1. C) 0. D) 6. Show Answer Correct Answer: B) 1. 19. A businessman had intended to borrow $ 5000 at 8 % per year for house purchase. When the interest rate rose to 10% he decided to borrow only $ 4000.Within what range is his interest elasticity of demand for loans? A) -1.3 to-1.7. B) 0.0 to-0.3. C) -0.4 to-0.7. D) -0.8 to-1.2. Show Answer Correct Answer: D) -0.8 to-1.2. 20. When the percentage change in the quantity demanded is greater than the percentage change in price, demand is said to be A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Elastic. 21. If price rises and total revenue falls then demand is A) Inelastic. B) Unitary. C) Elastic. D) None of above. Show Answer Correct Answer: C) Elastic. 22. The market for goldfish is competitive. From year 1 to year 2, both the price and the quantity of goldfish increase. This is most likely caused by: A) An increase in the supply. B) A decrease in the demand. C) An increase in the demand. D) A decrease in both the demand & the supply. Show Answer Correct Answer: C) An increase in the demand. 23. The elasticity on a item such as gas is: A) Very elastic. B) Very responsive. C) Not inelastic. D) Inelastic. Show Answer Correct Answer: D) Inelastic. 24. Which of the following is most likely to have a negative income elasticity of demand? A) Fancy restaurant meals. B) Day-old bakery goods at a discount bakery. C) Vacations. D) New cars. Show Answer Correct Answer: B) Day-old bakery goods at a discount bakery. 25. Public transport has an income elasticity of demand of-0.36. What does this mean about public transport? A) It is a normal good. B) It is a necessity. C) It is an inferior good. D) It has close substitutes. Show Answer Correct Answer: C) It is an inferior good. 26. The formula to calculate producer revenue is A) Price x Quantity sold. B) Price x Quantity Supplied. C) Revenue-cost. D) Base x height. Show Answer Correct Answer: A) Price x Quantity sold. 27. The price elasticity of demand for good X is 1. At a price of $ 12, quantity demanded is 4000 units.What will be the price when the quantity demanded is 20.000 units? A) $ 2.00. B) $ 20.00. C) $ 2.40. D) $ 2.66. Show Answer Correct Answer: C) $ 2.40. 28. If you have plenty of choice, and substitutes, the demand curve is A) Perfectly Inelastic. B) Inelastic. C) Elastic. D) Rubber. Show Answer Correct Answer: C) Elastic. 29. What is the relationship between two good if Ex =-2 A) Substitutes. B) No relationship. C) Complements. D) None of above. Show Answer Correct Answer: C) Complements. 30. It has been estimated that bread has an income elasticity of-0.04. What can be concluded about bread from this information? A) It has many complements. B) It is a normal good. C) It has many substitutes. D) It is an inferior good. Show Answer Correct Answer: D) It is an inferior good. ← 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 6Elasticity Of Demand Quiz 8Elasticity Of Demand Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books