This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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) 0.0 to-0.3. B) -0.4 to-0.7. C) -0.8 to-1.2. D) -1.3 to-1.7. Show Answer Correct Answer: C) -0.8 to-1.2. 2. 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. 3. 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. 4. 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. 5. The elasticity on a item such as gas is: A) Very elastic. B) Not inelastic. C) Very responsive. D) Inelastic. Show Answer Correct Answer: D) Inelastic. 6. Which of the following is most likely to have a negative income elasticity of demand? A) Fancy restaurant meals. B) Vacations. C) Day-old bakery goods at a discount bakery. D) New cars. Show Answer Correct Answer: C) Day-old bakery goods at a discount bakery. 7. Public transport has an income elasticity of demand of-0.36. What does this mean about public transport? A) It has close substitutes. B) It is a necessity. C) It is a normal good. D) It is an inferior good. Show Answer Correct Answer: D) It is an inferior good. 8. The formula to calculate producer revenue is A) Price x Quantity Supplied. B) Revenue-cost. C) Price x Quantity sold. D) Base x height. Show Answer Correct Answer: C) Price x Quantity sold. 9. 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) $ 2.40. C) $ 2.66. D) $ 20.00. Show Answer Correct Answer: B) $ 2.40. 10. Elastic demand products would be represented by: A) 0. B) > 1. C) < 1. D) None of above. Show Answer Correct Answer: B) > 1. 11. If you have plenty of choice, and substitutes, the demand curve is A) Inelastic. B) Perfectly Inelastic. C) Elastic. D) Rubber. Show Answer Correct Answer: C) Elastic. 12. 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. 13. It has been estimated that bread has an income elasticity of-0.04. What can be concluded about bread from this information? A) It is a normal good. B) It is an inferior good. C) It has many complements. D) It has many substitutes. Show Answer Correct Answer: B) It is an inferior good. 14. Which of these is most likely to quickly become available in larger quantities as a result of a price increase? A) Airline service. B) Babysitters. C) Medical doctors. D) Midsize cars. Show Answer Correct Answer: B) Babysitters. 15. If the cross price elasticity between 2 goods is positive, what is the relationship between these 2 goods? A) Substitutes. B) Complements. C) No relationship. D) Factor Inputs. Show Answer Correct Answer: A) Substitutes. 16. When a factory is running at full capacity, it means all its machinery is ..... utilised and the supply of the good will be price ..... A) Fully, elastic. B) Fully, inelastic. C) Under, elastic. D) Under, inelastic. Show Answer Correct Answer: B) Fully, inelastic. 17. What might shift an individual's demand curve for petrol to the left? A) A fall in the price of parking. B) A fall in the price of petrol. C) A rise in the price of cars. D) A rise in the price of public transport. Show Answer Correct Answer: C) A rise in the price of cars. 18. Which of the following would make a good more price inelastic? A) It consumes a low % of income. B) It has many substitutes. C) It is not addictive. D) It is a luxury. Show Answer Correct Answer: A) It consumes a low % of income. 19. A good that is perfectly elastic will have a ..... A) Steep demand curve. B) Vertical supply curve. C) Horizontal supply curve. D) Shallow supply curve. Show Answer Correct Answer: C) Horizontal supply curve. 20. A negative sign in price elasticity of demand indicates that the two products are A) Luxuries. B) Necessities. C) Compliments. D) Substitutes. Show Answer Correct Answer: C) Compliments. ← PreviousNext →Related QuizzesMicroeconomics 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 7Elasticity Of Demand Quiz 8Elasticity Of Demand Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books