This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Oil has seen a decrease in demand of 9%, while the price has increased 13% A) 1.44 inelastic. B) 1.44 elastic. C) .69 inelastic. D) .69 elastic. Show Answer Correct Answer: C) .69 inelastic. 2. A 5% fall in price of a good results in 10% rise in its demand .Calculate Ed A) -1. B) -3. C) -2. D) -5. Show Answer Correct Answer: C) -2. 3. A normal good is defined as a good for which demand increases as: A) Its price decreases. B) The price of substitutes increase. C) The income of consumers increases. D) The number of consumers of the good increases. Show Answer Correct Answer: C) The income of consumers increases. 4. Demand for agricultural products is ..... A) Elastic. B) Unitary elastic. C) Inelastic. D) Perfectly elastic. Show Answer Correct Answer: C) Inelastic. 5. The price decreases from RM2, 000 to RM1, 800. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct? A) The price elasticity of demand is-2. B) The good is inferior. C) Income elasticity is + 0.5. D) Income elasticity is + 2. Show Answer Correct Answer: A) The price elasticity of demand is-2. 6. When the price of a product rises from $ 10 to $ 15, the demand falls from 5000 to 4000 units. What is the value of the price elasticity of demand for the product? A) 0.2. B) 0.4. C) 1.5. D) 2.5. Show Answer Correct Answer: B) 0.4. 7. If the cross elasticity of demand is-2: A) The products are substitutes. B) The products are unrelated. C) The products are complements. D) The products are unitary elastic. Show Answer Correct Answer: C) The products are complements. 8. Quantity demanded increase 30% while price decreases 30%; this means that the price elasticity of demand is A) Unit elastic. B) Relatively elastic. C) Relatively inelastic. D) Perfectly inelastic. Show Answer Correct Answer: A) Unit elastic. 9. PED is inelastic and a firm raises its price. What happens to total revenue? A) Total revenue increases. B) Total revenue decreases. C) Total revenue stays the same. D) Marginal revenue decreases. Show Answer Correct Answer: A) Total revenue increases. 10. If storage of a good is cheap and readily available, supply is likely to be A) Relatively elastic. B) Relatively inelastic. C) Perfectly inelastic. D) Perfectly elastic. Show Answer Correct Answer: A) Relatively elastic. 11. Which of the following is not a determinant of PES? A) Factor Mobility. B) Adjustment Time Period. C) Technology. D) Type of Industry. Show Answer Correct Answer: C) Technology. 12. Which of the following does not determine demand elasticity? A) Availability of substitutes. B) Consumer's budget to spend on goods and services. C) Duration of adjustment period. D) Government spending. Show Answer Correct Answer: D) Government spending. 13. Do higher prices lead to increased revenues for a company? A) Always. B) Sometimes. C) Never. D) Only when demand is elastic. Show Answer Correct Answer: B) Sometimes. 14. If the elasticity of demand for a commodity is unity, an increase in its price will A) Decrease the quantity purchased. B) Have no effect on consumer surplus. C) Increase total expenditure on the commodity. D) Leave the quantity purchased unchanged. Show Answer Correct Answer: A) Decrease the quantity purchased. 15. Price elasticities of demand tend to A) Fall as higher prices are charged. B) Rise as higher prices are charged. C) Almost always be constant. D) Not be related to the length of time. Show Answer Correct Answer: B) Rise as higher prices are charged. 16. The graph of a demand curve that is perfectly elastic is: A) Positively sloped. B) Horizontal. C) Vertical. D) Negatively sloped. Show Answer Correct Answer: B) Horizontal. 17. A given percentage change in price leads to a small percentage change in quantity demanded. (Less than 1) A) Elastic Demand. B) Unitary Elastic Demand. C) Inelastic Demand. D) None of above. Show Answer Correct Answer: C) Inelastic Demand. 18. The PED of Good A is the degree of responsiveness of quantity demanded of Good A to a change in the ....., ceteris paribus. A) Price of Good A. B) Price of Good B. C) Supply of good A. D) Income of consumers of Good A. Show Answer Correct Answer: A) Price of Good A. 19. If income elasticity is .4 what can we assume about this good? A) It is an inferior good. B) It is a normal good. C) It is a complement. D) It is a substitute. Show Answer Correct Answer: B) It is a normal good. 20. What is a reason a product would be elastic? A) The product is a necessity. B) The quantity demanded is ten. C) The price is relatively small. D) The product can be easily substituted. Show Answer Correct Answer: D) The product can be easily substituted. ← PreviousNext →Related QuizzesMicroeconomics QuizzesElasticity Of Demand Quiz 1Elasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity 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