This quiz works best with JavaScript enabled. Home > Economics > Microeconomics > Elasticity Of Demand And Supply > Elasticity Of Demand And Supply – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand And Supply Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. "The percentage of change in quantity supplied is smaller than the percentage of change in price" . This statement refers to ..... A) Elastic. B) Inelastic. C) Perfectly elastic. D) Perfectly inelastic. Show Answer Correct Answer: B) Inelastic. 2. If the income elasticity of demand is greater than 1, the commodity is A) A necessary. B) An Inferior. C) A luxury. D) None of these. Show Answer Correct Answer: C) A luxury. 3. True or FalseIt is said to be ELASTIC when the percentage is greater than 1 (>1) A) Tama. B) Mali. Show Answer Correct Answer: A) Tama. 4. The perfectly elastic the demand curve is the 100% benefit of subsidy that will be enjoyed by the buyers. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 5. If the value of cross elasticity of demand is negative, goods C and D are ..... A) Tea and coffee. B) Pen and ink. C) Ink and shoes. D) Shoes and camera. Show Answer Correct Answer: B) Pen and ink. 6. When cross-price elasticity of demand (XED) is negative, it indicates that the two goods are: A) Complements. B) Substitutes. C) Independent. D) Perfect substitutes. Show Answer Correct Answer: A) Complements. 7. How do you calculate cross elasticity of demand? A) By adding the percentage change in quantity demanded of one good to the percentage change in the price of another good. B) By multiplying the percentage change in quantity demanded of one good with the percentage change in the price of another good. C) By dividing the percentage change in quantity demanded of one good by the percentage change in the price of another good. D) By subtracting the percentage change in quantity demanded of one good from the percentage change in the price of another good. Show Answer Correct Answer: C) By dividing the percentage change in quantity demanded of one good by the percentage change in the price of another good. 8. The price elasticity of demand for essential medicines is likely to be: A) Elastic. B) Inelastic. C) Unitary elastic. D) Perfectly elastic. Show Answer Correct Answer: B) Inelastic. 9. $Ed=\frac{%\Delta Q}{%\Delta P}$ A) 0.49%. B) 0.94%. C) Thank you all. D) None of above. Show Answer Correct Answer: A) 0.49%. 10. $Ed=\frac{%\Delta Q}{%\Delta P}=\frac{\frac{\frac{Q_2-Q_1}{Q_1+Q_2}}{2}}{\frac{P_2-P_1}{\frac{P_1+P_2}{2}}}$ A) 0.543%. B) 0.618%. Show Answer Correct Answer: B) 0.618%. 11. If the value of the coefficient of cross elasticity of demand between goods X and Y goods are negative, then X and Y goods are substitute's goods. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 12. What are the determinants of elasticity of demand? A) Availability of substitutes, necessity or luxury, proportion of income spent, time period, and definition of the market. B) Color of the product, brand popularity, weather conditions. C) Quality of customer service, packaging, and advertising. D) Customer's age, gender, and occupation. Show Answer Correct Answer: A) Availability of substitutes, necessity or luxury, proportion of income spent, time period, and definition of the market. 13. The price elasticity of demand for a textbook is estimated to be 1 no matter what the price or quantity demanded. In this case, A) A 10 percent increase in price will result in a 10 percent increase in the quantity demanded. B) An increase in price will decrease the total revenue of sellers. C) A decrease in price will increase the total revenue of sellers. D) A 10 percent increase in price will result in a 10 percent decrease in the quantity demanded. Show Answer Correct Answer: D) A 10 percent increase in price will result in a 10 percent decrease in the quantity demanded. 14. For which type of price elasticity should the negative sign be omitted? A) Price Elasticity of Demand. B) Price Elasticity of Supply. C) Income Elasticity of Demand. D) Cross Price Elasticity of demand. Show Answer Correct Answer: A) Price Elasticity of Demand. 15. Price elasticity of demand for vertical demand curve is ..... A) Unitary elastic. B) Perfectly elastic. C) Perfectly inelastic. D) Elastic. Show Answer Correct Answer: C) Perfectly inelastic. 16. If the value of price elasticity of demand for goods is-1.5, this means that ..... A) A price increase of 1% will cause a 1.5% increase in quantity demand. B) A price increase of 1% will cause a 1.5% decrease in quantity demand. C) A price increase of 1% will cause a 1.5% decrease in price. D) A price increase of 1% will cause a 1.5% increase in price. Show Answer Correct Answer: B) A price increase of 1% will cause a 1.5% decrease in quantity demand. 17. What factors determine the price elasticity of demand? A) Geographical location, consumer preferences, and market competition. B) Availability of substitutes, necessity or luxury of the good, proportion of income spent on the good, time period considered, and habit-forming nature of the good. C) Brand loyalty, consumer income, and production costs. D) Price of the good, advertising and marketing efforts, and government regulations. Show Answer Correct Answer: B) Availability of substitutes, necessity or luxury of the good, proportion of income spent on the good, time period considered, and habit-forming nature of the good. 18. Which of the following two goods is more likely to be inelastically demanded? A) Demand for tangerines. B) Demand for fruit. Show Answer Correct Answer: B) Demand for fruit. 19. If the value of cross elasticity of demand is positive, goods R and S are ..... A) Milo and Vico. B) Car and petrol. C) Table and apple. D) Pen and ink. Show Answer Correct Answer: A) Milo and Vico. 20. "Measure of the responsiveness of quantity demanded or quantity supplied" A) Elasticity. B) Demand. C) Supply. D) Awit. Show Answer Correct Answer: A) Elasticity. Next →Related QuizzesMicroeconomics QuizzesEconomics QuizzesElasticity Of Demand And Supply Quiz 2Elasticity Of Demand And Supply Quiz 3Elasticity Of Demand And Supply Quiz 4Elasticity Of Demand And Supply Quiz 5Elasticity Of Demand And Supply Quiz 6Elasticity Of Demand And Supply Quiz 7 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books