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Elasticity Of Demand Quiz 9 (20 MCQs)

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1. Price elasticity of demand is (-)2.The consumer buys certain quantity of this good at a price of Rs 10.When the price falls he buys 40 percent more quantity .What is the new price?
2. A given percentage change in price leads to an equal percentage change in quantity demanded. (Equal to 1)
3. Of the following, which one is most likely to have a negative income elasticity of demand?
4. The price of ice cream increased from $ 2.00 to $ 2.20 and the quantity demanded decreased from 10 to 8 units per hour. Note:in economics, elasticity is generally reported as a positive number even when it is negative. Use the midpoint formula.
5. The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will they be now?
6. Elasticity of demand is said to be elastic when elasticity is:
7. The reason why Chevrolet cars are very elastic is because .....
8. If cross price elasticity of of good a and good b is-2. What does this mean about good a and b?
9. When will it not be possible to use price as a rationing mechanism?
10. What measures demand elasticity?
11. Measurement of degree of responsiveness of quantity demanded to changes in price is called
12. Which of these is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home?
13. The difference between the highest price a consumer will pay and the actual price paid for a good or service.
14. A producer has a good which PED is assessed to be 1.7. If he wishes to increase total revenue, what should the producer do?
15. If P = $ 10 for Tiny Tee-shirts, Q = 20, but if P = $ 5, Q = 25. The price elasticity of demand for Tiny Tee-shirts is:
16. If P = $ 10 for Tiny Tee-shirts, Q = 20, but if P = $ 5, Q = 25. This good is .....
17. You are on a committe that is considering ways to raise money for your city's symphony program. You would recommend increasing the price of symphony tickets only if you thought the demand curve for these tickets was
18. If the XED between 2 goods is positive, what is the relationship between these 2 goods?
19. Bonus:The loss of total surplus when a market fails to reach a competitive equilibrium due to a market distortion, like a tax.
20. If a change in the supply of a good results in a percentage change in quantity demanded that exceeds in absolute value the percentage change in price, then demand is relatively:
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