The formula for calculating elasticity of demand is:

The % change in quantity demanded over the % change in price

The % change in price over the % change in quantity demanded

The change in price over the change in quantity demaned

The change in quantity demanded over the change in price

the responsiveness of quantity supplied to a change in the price of good itself, ceteris paribus.

the responsiveness of quantity demanded to a change in price of the good itself.

the responsiveness of quantity demanded to a change in price of the good itself, ceteris paribus.

the responsiveness of quantity supplied to a change in price of the good itself.

When is the price elasticity of demand for a good likely to be high?

When there are many substitutes for the good

When expenditure on the good is a small part of total expenditure

Income elasticity of demand measures how

the quantity demanded changes as consumer income changes.

consumer purchasing power is affected by a change in the price of a good.

the price of a good is affected when there is a change in consumer income.

many units of a good a consumer can buy given a certain income level.

What will happen during a recession?

Demand for substitute goods and inferior goods will rise

Demand for substitute goods and inferior goods will fall

Demand for substitute goods will fall and inferior goods will rise

For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

There are many substitutes for this good.

The market for the good is narrowly defined.

The relevant time horizon is long.

The price elasticity of demand measures how much

quantity demanded responds to a change in price.

quantity demanded responds to a change in income.

price responds to a change in demand.

demand responds to a change in supply.

Income elasticity of demand measures how

the quantity demanded changes as consumer income changes.

consumer purchasing power is affected by a change in the price of a good.

the price of a good is affected when there is a change in consumer income.

many units of a good a consumer can buy given a certain income level.

An advance in farm technology that results in an increased market supply is

bad for farmers because total revenue will fall but good for consumers because prices for food will fall.

good for farmers because it raises prices for their products but bad for consumers because it raises prices consumers pay for food.

good for farmers because it raises prices for their products and also good for consumers because more output is available for consumption.

bad for farmers because total revenue will fall and bad for consumers because farmers will raise the price of food to increase their total revenue.

Which of the following is NOT a determinant for demand elasticity?

the availability of substitutes

whether or not it is a luxury vs. a necessity

If the cross elasticity of demand is -2:

The products are unitary elastic

If a rise in the price of good A decreases the quantity of good B demanded,

The cross elasticity of demand is negative.

The cross elasticity of demand is positive.

If the cross elasticity of demand between goods A and B is positive,

The demands for A and B are both price elastic.

The demands for A and B are both price inelastic.

What is the difference between normal and inferior goods?

Demand for inferior goods decrease when income increases and demand for normal goods increase when income increases

Demand for normal goods decreases when income increases and demand for inferior goods increases when income increases

Demand for normal goods increases when income decreases and demand for inferior goods increases when income increases

Demand for inferior goods decreases when income decreases and demand for normal goods increases when income increases

Elasticity

Quiz

•

Specialty

•

11th - 12th Grade

•

Practice Problem

•

Medium

Samantha Correia

Used 292+ times

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quantity supplied to changes in income.

quantity supplied to changes in demand.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The above figure illustrates the demand curve for a good. The good has

many substitutes.

only one substitute.

no substitutes.

only a few substitutes.

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To determine whether two goods are substitutes or complements, an economist would estimate the

You are on a committee that is considering ways to raise money for your House's fundraiser. You would recommend increasing the price of raffe tickets only if you thought the demand curve for these tickets was

Which of the following is most likely to have a negative income elasticity of demand?

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The elasticity of supply measures the responsiveness of

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The supply of perishable good such as bananas is more price _ than durable goods such as smart phones because of lack of __ for perishable goods.

When a factory is running at full capacity, it means all its machinery is __ utilised and the supply of the good will be price _.