This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The PED for a product is-0.5. Following a sales promotion demand has risen by 24%. How big was the discount offered to customers? A) 3%. B) 12%. C) £12. D) 24%. Show Answer Correct Answer: B) 12%. 2. For which type of good would you expect the price elasticity of demand to be highest? A) Giffen goods. B) Normal goods. C) Luxury goods. D) Inferior goods. Show Answer Correct Answer: C) Luxury goods. 3. Elasticity measures ..... A) The extent of a change in demand. B) The extent of a change in price. C) The quantity demanded. D) The % of income a good consumes. Show Answer Correct Answer: A) The extent of a change in demand. 4. If average income rises from $ 18, 000 per year to $ 22, 000 per year and annual gasoline consumption per household rises from 1000 to 1500 gallons, the income elasticity of demand for gas is: A) In the inferior range. B) 0.5. C) 1. D) 2. Show Answer Correct Answer: D) 2. 5. If the YED of a good is assessed to be 1.7, the good can be classified as a A) Inferior Good. B) Normal Good. C) Necessity. D) None of the above. Show Answer Correct Answer: B) Normal Good. 6. Red Wing Shoes has seen a decrease in demand of 40%, while the price has increased 20% A) .5 inelastic. B) .5 elastic. C) 2 inelastic. D) 2 elastic. Show Answer Correct Answer: D) 2 elastic. 7. The elasticity of supply measures the responsiveness of A) Quantity supplied to changes in price. B) Quantity demanded to changes in supply. C) Quantity supplied to changes in income. D) Quantity supplied to changes in demand. Show Answer Correct Answer: A) Quantity supplied to changes in price. 8. A per unit tax on a good or service like a tax on gasoline. A) Excise tax. B) Revenue tax. C) Income tax. D) Progressive tax. Show Answer Correct Answer: A) Excise tax. 9. A change in price doesn't cause a change in demand at all What is the PED value? A) 0. B) 1. C) >1. D) <1. Show Answer Correct Answer: A) 0. 10. A cut in price from $ 75 to $ 60 sees demand for a product rise by from 1, 200 units to 1, 500 units. What would the price elasticity of demand be for this product? A) -0.8. B) -1. C) -1.25. D) -2. Show Answer Correct Answer: C) -1.25. 11. In the long run price elasticity of demand generally does what for normal goods A) Increases. B) Decreases. C) Remains constant. D) Becomes perfectly inelastic. Show Answer Correct Answer: A) Increases. 12. If the income elasticity is 0.6 and income increases by 10%, what would the demand increasse by? A) 8. B) 19. C) 6. D) 24. Show Answer Correct Answer: C) 6. 13. A consumer buys 100 units of good X at rs 5 per unit. The elasticity is (-)2. At what price will he be willing to buy 140 units of good X? A) 4. B) 3. C) 2. D) 1. Show Answer Correct Answer: A) 4. 14. Result is positive and under 1 A) Normal Good. B) Inferior Good. C) Luxury Good. D) None of above. Show Answer Correct Answer: A) Normal Good. 15. When will demand for Inferior goods rise? A) During a recession. B) When wages rise more slowly than the price of products. C) When unemployment is high. D) All of these. Show Answer Correct Answer: D) All of these. 16. The medication known as insulin has seen a decrease in demand of 2%, while the price has increased 10% A) 5 inelastic. B) 5 elastic. C) .2 inelastic. D) .2 elastic. Show Answer Correct Answer: C) .2 inelastic. 17. Some factors that affect price elasticity are ..... A) The number of subtitutes and how dependant you are on the good. B) The number of customers and producers of the good. C) How dependant you are and the quality of the good. D) None of above. Show Answer Correct Answer: A) The number of subtitutes and how dependant you are on the good. 18. Which of the following products would likely have an inelastic demand? A) Fizzy cola, a carbonated soda. B) A meal at an expensive steak house. C) A car repair. D) Nike's Air Force One trainers. Show Answer Correct Answer: C) A car repair. 19. A company sells solar batteries. Last year income rose by 2% as a result demand increased from 1.6million units to 1.8 million. The product is a/an ..... product A) Inferior. B) Normal. C) Luxury. D) None of these. Show Answer Correct Answer: C) Luxury. 20. If Total Revenue does not change when Price changes A) Unit elastic. B) Elastic. C) Inelastic. D) None of above. Show Answer Correct Answer: A) Unit elastic. ← PreviousNext →Related QuizzesMicroeconomics QuizzesElasticity Of Demand Quiz 1Elasticity Of Demand Quiz 2Elasticity Of Demand Quiz 3Elasticity Of Demand Quiz 4Elasticity 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