This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Area of economics that deals with behaviors and decision making of units A) Microeconomics. B) Demand curve. C) Demand. D) Marginal utility. Show Answer Correct Answer: A) Microeconomics. 2. Shows how sensitive consumer demand is to changes in price A) Price elasticity of demand. B) Price elasticity of supply. C) Income elasticity. D) Consumer surplus. Show Answer Correct Answer: A) Price elasticity of demand. 3. If income rises by 12% and demand rises by 20%, what is the YED? A) 1.97. B) 0.6. C) 1.67. D) 0.92. Show Answer Correct Answer: C) 1.67. 4. Alyssa's Floral Shoppe dropped its prices for a dozen roses from £45 to £35 this year. Because of this decrease in price, the quantity sold increased from 1000 to 1500. The price elasticity of demand for Alyssa's roses is: A) 1.00. B) 1.6. C) 0.625. D) 2.25. Show Answer Correct Answer: B) 1.6. 5. Suppose that when paper plates sell for $ 2 per package, the demand is 5 million. Which of the following is the total revenue earned? A) $ 10 million. B) $ 3 million. C) $ 7 million. D) $ 1 million. Show Answer Correct Answer: A) $ 10 million. 6. If a 1 percent decrease in the price of a pound of squash results in a larger percentage decrease in the quantity supplied, A) Demand is inelastic. B) Demand is elastic. C) Supply is inelastic. D) Supply is elastic. Show Answer Correct Answer: D) Supply is elastic. 7. If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of a good, demand is: A) Relatively inelastic. B) Relatively elastic. C) Perfectly elastic. D) Perfectly inelastic. Show Answer Correct Answer: B) Relatively elastic. 8. For much of the world rice is a staple food. If the world price of rice increases 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%. 9. What is the definition for income elasticity of demand? A) The resposiveness of demand to a change in price. B) The responsiveness of demand to a change in income. C) The un-resposiveness of demand to a change in price. D) The un-responsiveness of demand to a change in income. Show Answer Correct Answer: B) The responsiveness of demand to a change in income. 10. Result is positive and over 1 A) Normal Good. B) Inferior Good. C) Luxury Good. D) None of above. Show Answer Correct Answer: C) Luxury Good. 11. If the cross-price elasticity between two commodities is 1.5, A) The two goods are luxury goods. B) The two goods are complements. C) The two goods are substitutes. D) The two goods are normal goods. Show Answer Correct Answer: C) The two goods are substitutes. 12. A price ceiling is characterized by A) Price set below the current equilibrium market price of a good. B) Price set above current equilibrium market price for a good. C) Shift of the demand curve. D) Shift of the supply curve. Show Answer Correct Answer: A) Price set below the current equilibrium market price of a good. 13. Complementary goods have: A) The same elasticities of demand. B) Very low price elasticities of demand. C) Negative cross price elasticities of demand with respect to each other. D) Positive cross elasticities of demand.with respect to each other. Show Answer Correct Answer: C) Negative cross price elasticities of demand with respect to each other. 14. The price of a commodity is Rs 50 per unit and its quantity demanded is 500 units .Its price rises to Rs 60 per unit and quantity demand falls by 90 units. Calculate Ed A) -1. B) -0.6. C) -0.9. D) -2. Show Answer Correct Answer: C) -0.9. 15. Wheat has seen a decrease in demand of 5%, while the price has increased 7% A) 1.4 inelastic. B) 1.4 elastic. C) .71 inelastic. D) .71 elastic. Show Answer Correct Answer: C) .71 inelastic. 16. The supply of perishable good such as bananas is more price ..... than durable goods such as smart phones because of lack of ..... for perishable goods. A) Inelastic, good weather. B) Elastic, good weather. C) Inelastic, stock. D) Elastic, stock. Show Answer Correct Answer: C) Inelastic, stock. 17. Why do firms need to know whether demand for its product is elastic or inelastic? A) Elasticity of demand can affect a firms total revenues. B) Elasticity of demand can affect consumers. C) Elasticity of demand can affect the economy. D) None of above. Show Answer Correct Answer: A) Elasticity of demand can affect a firms total revenues. 18. What would not affect the position of the demand curve for wigs? A) An increase in incomes. B) A reduction in the price of hairdressing. C) An increase in wigs worn by television celebrities. D) A reduction in the price of wigs. Show Answer Correct Answer: D) A reduction in the price of wigs. 19. What is the price elasticity of demand (PED) for a product for which a 10% price rise reduces sales volume by 5%? A) -0.5. B) -2.0. C) -0.2. D) -5.0. Show Answer Correct Answer: A) -0.5. 20. A 10 percent decrease in income decreases the quantity demanded of scented candles by 3 percent. The income elasticity of demand for scented candles is: A) 0.3. B) -0.3. C) 3. D) -3.3. Show Answer Correct Answer: A) 0.3. ← PreviousNext →Related QuizzesMicroeconomics QuizzesElasticity Of Demand Quiz 1Elasticity 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