This quiz works best with JavaScript enabled. Home > Finance > 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 (30 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) Inelastic. B) Perfectly elastic. C) Perfectly inelastic. D) Elastic. Show Answer Correct Answer: A) 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) FALSE. B) TRUE. Show Answer Correct Answer: B) 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) Substitutes. B) Independent. C) Complements. D) Perfect substitutes. Show Answer Correct Answer: C) 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) Perfectly elastic. B) Elastic. C) Unitary elastic. D) Inelastic. Show Answer Correct Answer: D) 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) FALSE. B) TRUE. Show Answer Correct Answer: A) 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) Perfectly elastic. B) Perfectly inelastic. C) Elastic. D) Unitary elastic. Show Answer Correct Answer: B) 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. 21. The price elasticity of demand for goods or services measures the change in quantity demanded in response to change in price. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 22. What does a perfectly vertical supply curve indicate? A) Quantity supplied remains constant. B) Quantity supplied increases with price. C) Quantity supplied is unpredictable. D) Quantity supplied decreases with price. Show Answer Correct Answer: A) Quantity supplied remains constant. 23. What is cross elasticity of demand? A) Measure of the responsiveness of the quantity demanded of one good to a change in the price of another good. B) The amount of elasticity in a cross-shaped demand curve. C) The ratio of demand for two unrelated goods. D) The measure of demand for a product in different countries. Show Answer Correct Answer: A) Measure of the responsiveness of the quantity demanded of one good to a change in the price of another good. 24. Complementary goods have: A) The same elasticities of demand. B) Very low price elasticities of demand. C) Negative cross price elasticities of demand with respect to each other. D) Positive cross elasticities of demand.with respect to each other. Show Answer Correct Answer: C) Negative cross price elasticities of demand with respect to each other. 25. If the price of a DVD falls from $ 20 to $ 12 and the quantity of DVDs supplied decreases from 118, 000 per hour to 100, 000 per hour, at the midpoint between these two prices the elasticity of supply equals A) 2.94. B) 2.98. C) 0.33. D) 1.56. Show Answer Correct Answer: C) 0.33. 26. A 3% increase in the price of tea causes a 6% increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is ..... A) +2.0. B) -2.0. C) +0.5. D) -0.5. Show Answer Correct Answer: A) +2.0. 27. True or False The elasticity of demand can be said to be Unitary if its percentage is equal to zero (0) A) Tama. B) Mali. Show Answer Correct Answer: B) Mali. 28. If the price of a product doubled and in response the quantity supplied also doubled then the PES is equal to A) 2. B) 1. C) -1. D) O. Show Answer Correct Answer: B) 1. 29. A supply curve that is a perfectly vertical line is indicative of A) Perfectly inelastic supply. B) Perfectly elastic supply. C) Elastic supply. D) Unitary elastic supply. Show Answer Correct Answer: A) Perfectly inelastic supply. 30. If the income elasticity of demand for a good is greater than 0 but less than 1, then the good is ..... A) Provided by a monopoly producer. B) Provider by a competitive producer. C) An economic luxury. D) An economic necessity. Show Answer Correct Answer: D) An economic necessity. 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 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books