This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If goods are complements, definitely their A) Income elasticities are negative. B) Income elasticities are positive. C) Cross elasticities are positive. D) Cross elasticities are negative. Show Answer Correct Answer: D) Cross elasticities are negative. 2. If percentage change on quantity demanded is +29% and the percentage change in income is +11%. What is income elasticity of demand? A) 0.263. B) 2.73. C) 0.38. D) 2.63. Show Answer Correct Answer: D) 2.63. 3. Price elasticity of demand is (-) 1.5 At a given price the consumer buys 40 units of the good. How many units will the consumer buy if the price falls by 20 % A) 50. B) 52. C) 54. D) 56. Show Answer Correct Answer: B) 52. 4. If the elasticity of demand for a product equals 1.5, then an increase in the product price will cause total revenue to A) Decrease. B) Increase. C) Remain the same. D) None of above. Show Answer Correct Answer: A) Decrease. 5. The quantity demanded of a commodity falls by 5 units when its price rises by Re 1 per unit. If price elasticity of demand is (-) 1.5 Calculate the price before change if at this price quantity demanded was 60 units. A) 18. B) 30. C) 29. D) 20. Show Answer Correct Answer: A) 18. 6. The price of rice has increased by 10%. What is the likely percentage change in quantity demanded? A) Fall by 12%. B) Fall by 5%. C) Fall by 10%. D) Fall by 20%. Show Answer Correct Answer: B) Fall by 5%. 7. The Price elasticity of soda is-0.8, therefore we can say that soda is ..... A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: B) Inelastic. 8. If PED of a good is 0.4, we say that demand for the good is A) Price elastic. B) Perfectly price elastic. C) Unitary price elastic. D) Price inelastic. Show Answer Correct Answer: D) Price inelastic. 9. Price Elasticity of Demand is calculated by A) % change in Quantity Demanded divided by % change in % change in Price. B) % change in Price divided by % change in Quantity Demanded. C) Price divided by Total Revenue. D) Total Revenue divided by Price. Show Answer Correct Answer: A) % change in Quantity Demanded divided by % change in % change in Price. 10. Change in quantity demanded due to a change in price that alters a consumers real income A) Elasticity. B) Inelastic. C) Income effect. D) Total expenditures. Show Answer Correct Answer: C) Income effect. 11. Yuna said, 'I go ice skating five times a week. If the ticket price doubles, I will go only four times a week.'Yuna's demand for ice skating is A) Perfectly inelastic. B) Inelastic. C) Unitarily elastic. D) Elastic. Show Answer Correct Answer: B) Inelastic. 12. Elasticity under percent under 0 A) Subsitute. B) Future expectations. C) Market size. D) Complementary. Show Answer Correct Answer: D) Complementary. 13. How is PED calculated? A) Change in price / change in quantity. B) Change in quantity / change in price. C) Percentage change in quantity / percentage change in price. D) Percentage change in price / percentage change in quantity. Show Answer Correct Answer: C) Percentage change in quantity / percentage change in price. 14. A decline in the price of good X by Rs 5 cause an increase of 20 units on its demand which goes up to 50 units. The new price is Rs 15 .Calculate Ed A) $-\frac{8}{3}$. B) $-\frac{5}{3}$. C) $-\frac{7}{3}$. D) $-\frac{9}{3}$. Show Answer Correct Answer: A) $-\frac{8}{3}$. 15. Cross elasticity of demand is ..... A) Negative for complementary goods. B) Unitary for inferior goods. C) Negative for substitute goods. D) Positive for inferior goods. Show Answer Correct Answer: A) Negative for complementary goods. 16. Price elasticity of demand that has a coefficient of >1 A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Elastic. 17. Which of the following would be an inelastic good or service? A) Headphones. B) Vacation to Spain. C) Nike Shoes. D) Gasoline. Show Answer Correct Answer: D) Gasoline. 18. A 5% rise the price of beef decreased quantity of beef demanded by 10% and increase the quantity demanded of chicken by 15%(i) Calculate the cross elasticity of demand between beef and chicken A) 1/3. B) 3. C) 2. D) 1/2. Show Answer Correct Answer: B) 3. 19. The demand curve for new cars in a country shifted to the left.Which change could have caused such a shift? A) An increase in real disposable income. B) An increase in the cost of borrowing. C) An increase in the price of new cars. D) An increase in the price of train travel. Show Answer Correct Answer: B) An increase in the cost of borrowing. 20. If the demand is perfectly elastic, then a shift in the supply curve does not affect the equilibrium price. A) True. B) False. C) Uncertain. D) None of above. Show Answer Correct Answer: A) True. Next →Related QuizzesMicroeconomics QuizzesElasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity Of Demand Quiz 4Elasticity Of Demand Quiz 5Elasticity Of Demand Quiz 6Elasticity Of Demand Quiz 7Elasticity Of Demand Quiz 8Elasticity Of Demand Quiz 9Elasticity Of Demand Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books