This quiz works best with JavaScript enabled. Home > Microeconomics > Elasticity > Elasticity Of Demand – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How a change in income affects the quantity demanded for a product. A) Income elasticity of demand. B) Elasticity of supply. C) Total revenue. D) Consumer surplus. Show Answer Correct Answer: A) Income elasticity of demand. 2. If the income elasticity <1 what type of good is it? A) Inelastic. B) Complementary. C) Inferior. D) Elastic. Show Answer Correct Answer: A) Inelastic. 3. When the supply of a good decreases, equilibrium price stays the same.What is the price elasticity of demand of the good? A) -1. B) Zero. C) +1. D) Infinite. Show Answer Correct Answer: D) Infinite. 4. Imagine a good with a small, positive income elasticity of demand. What type of good is it? A) Inferior, necessary good. B) Inferior, luxury good. C) Normal, necessary good. D) Normal, luxury good. Show Answer Correct Answer: C) Normal, necessary good. 5. An increase or a decrease in quantity demanded due to a change in the relative price of the replacement product A) Substitute. B) Substitute effect. C) Marginal utility. D) Income effect. Show Answer Correct Answer: B) Substitute effect. 6. Which of the following goods is the most price elastic? A) Televisions. B) Qtips. C) Shoes. D) Cars. Show Answer Correct Answer: D) Cars. 7. Which of the following is NOT a determinant for demand elasticity? A) The availability of substitutes. B) A good's relative importance. C) The environment. D) Change in population. Show Answer Correct Answer: C) The environment. 8. What is most likely to make the demand for Good X inelastic? A) Good X is a luxury good. B) Good X is habit-forming. C) The proportion of income spent on Good X is very high. D) There are a large number of substitutes for Good X. Show Answer Correct Answer: B) Good X is habit-forming. 9. Which of the following items would be best described as mostly inelastic? A) Android phone. B) Tim Hortons Coffee. C) Cars. D) Vacation to Hawaii. Show Answer Correct Answer: B) Tim Hortons Coffee. 10. YED = 0 is referring to A) Normal Goods. B) Inferior Goods. C) Luxury Goods. D) Necessity Goods. Show Answer Correct Answer: D) Necessity Goods. 11. The price elasticity of demand for tissues is 0.66. This means the demand for tissues is relatively A) Elastic. B) Unit elastic. C) Inelastic. D) Really expensive. Show Answer Correct Answer: C) Inelastic. 12. A 20% price cut causes a 15% increase in quantity demanded (sales) A) PED =-1.33. B) PED =-0.75. C) PED =-7.5. D) PED =-1.75. Show Answer Correct Answer: B) PED =-0.75. 13. A given percentage change in price leads to a large percentage change in quantity demanded (Greater than 1) A) Elastic Demand. B) Unitary Elastic Demand. C) Inelastic Demand. D) None of above. Show Answer Correct Answer: A) Elastic Demand. 14. A PED value of-1.2 means ..... A) The change in demand is more than the change in price. B) The change in demand is less than the change in price. C) A change in price leads to a proportionate change in demand. D) A change in price causes a complete stop to demand. Show Answer Correct Answer: A) The change in demand is more than the change in price. 15. Question 3Yesterday, the price of envelopes was RM3 a box, and Ahmad was willing to buy 10 boxes. Today, the price has gone up to RM3.75 a box, and Ahmad is now willing to buy 8 boxes. What is Ahmad's elasticity of demand? A) -1.00. B) -0.50. C) -0.30. D) -0.80. Show Answer Correct Answer: D) -0.80. 16. If your salary increase by 30 % and in response you increase your clothing purchases by 20 %, income elasticity equals ..... and clothing is ..... A) 0.67; normal good. B) .67; inferior good. C) 1.5; normal good. D) 1.5; luxury good. Show Answer Correct Answer: A) 0.67; normal good. 17. If Price and Total Revenue are inversely related A) Elastic. B) Inelastic. C) Unit elastic. D) None of above. Show Answer Correct Answer: A) Elastic. 18. People buy less of them when they are well off but more of them during hard times. This describes ..... A) Inferior goods. B) Luxury goods. C) Natural goods. D) Normal goods. Show Answer Correct Answer: A) Inferior goods. 19. What is necessary for consumer surplus to be zero? A) Demand is perfectly elastic. B) Demand is perfectly inelastic. C) Supply is perfectly elastic. D) Supply is perfectly inelastic. Show Answer Correct Answer: A) Demand is perfectly elastic. 20. In which situation is the demand for a product said to be price elastic? A) A fall in price increases expenditure on the product. B) A fall in price increases quantity demanded. C) A rise in price increases expenditure on the product. D) A rise in price reduces quantity demanded. Show Answer Correct Answer: A) A fall in price increases expenditure on the product. ← 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 8Elasticity Of Demand Quiz 9Elasticity Of Demand Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books