This quiz works best with JavaScript enabled. Home > Finance > Economics > Microeconomics > Elasticity Of Demand And Supply > Elasticity Of Demand And Supply – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Elasticity Of Demand And Supply Quiz 5 (14 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What does it mean? Ed = 0 A) Perfectly inelastic demand. B) Inelastic demand. C) Unitarily elastic demand. D) Elastic demand. E) Perfectly elastic demand. Show Answer Correct Answer: A) Perfectly inelastic demand. 2. Income elasticity of demand is A) The responsiveness of demand to a change in price. B) The responsiveness of demand to a change in income. Show Answer Correct Answer: B) The responsiveness of demand to a change in income. 3. Explain cross elasticity of demand. A) Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the quantity demanded of another good. B) Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the income of consumers. C) Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. D) Cross elasticity of demand measures the responsiveness of the quantity supplied of one good to a change in the price of another good. Show Answer Correct Answer: C) Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. 4. Define price elasticity of supply. A) Price elasticity of supply measures the responsiveness of the quantity supplied of a good or service to a change in its price. B) Price elasticity of supply measures the responsiveness of the quantity demanded of a good or service to a change in its price. C) Price elasticity of supply measures the responsiveness of the price of a good or service to a change in its quantity supplied. D) Price elasticity of supply measures the responsiveness of the quantity supplied of a good or service to a change in demand. Show Answer Correct Answer: A) Price elasticity of supply measures the responsiveness of the quantity supplied of a good or service to a change in its price. 5. When price elasticity of demand for a product is more than 1, an increase in the price of product causes total revenue to decrease. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 6. After an economic boom, will the demand curve for TVs be more elastic or more inelastic? A) More inelastic. B) More elastic. Show Answer Correct Answer: A) More inelastic. 7. If a 1 percent decrease in the price of a pound of oranges results in a smaller percentage decrease in the quantity supplied, then: A) Supply is inelastic. B) Demand is inelastic. C) Supply is elastic. D) Demand is elastic. Show Answer Correct Answer: A) Supply is inelastic. 8. What are the factors that determine the cross elasticity of supply? A) Government regulations, consumer income, market competition. B) Quality of the product, advertising strategies, brand loyalty. C) Availability of substitute goods, time period, flexibility of production processes. D) Price of the product, demand for the product, cost of production. Show Answer Correct Answer: C) Availability of substitute goods, time period, flexibility of production processes. 9. The price of petrol increase from RM1.62 to RM1.92 per liter causes the total of quantity demand of vehicle decrease from 10, 000 units to 8, 000 units per year. Calculate the cross elasticity of demand between petrol and vehicle. A) -2.25. B) -1.68. C) -0.95. D) -1.08. Show Answer Correct Answer: D) -1.08. 10. If a 3 percent decrease in the price of BMW cars results in a 5 percent increase in the number of BMW cars sold, the demand for BMW cars is unit elastic A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 11. Area of economics that deals with behaviors and decision making of units A) Microeconomics. B) Demand curve. C) Demand. D) Marginal utility. Show Answer Correct Answer: A) Microeconomics. 12. Suppose an increase in demand causes the price to increase from $ 2 to $ 4 and the quantity to increase from 1, 000 to 1, 800. Then, at the midpoint between these two prices, the elasticity of supply equals A) 2.74. B) 0.84. C) 0.86. D) 1.17. Show Answer Correct Answer: C) 0.86. 13. The desire, ability and willingness to buy a product A) Demand. B) Supply. C) Consume. D) None of above. Show Answer Correct Answer: A) Demand. 14. The value of income elasticity of demand will help the economist to estimate the types of goods below EXCEPT ..... A) Normal goods. B) Luxury goods. C) Substitute goods. D) Inferior goods. Show Answer Correct Answer: C) Substitute goods. ← PreviousRelated QuizzesMicroeconomics QuizzesEconomics QuizzesElasticity Of Demand And Supply Quiz 1Elasticity Of Demand And Supply Quiz 2Elasticity Of Demand And Supply Quiz 3Elasticity Of Demand And Supply Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books