Elasticities Practice

The Price Elasticity of Demand (PED) of strawberries is -1.8, and the PED of fruits is -0.4. Which of the following statements is true?

• The demand for fruits is price-elastic.

• An increase in the price of strawberries will lead to a more than proportionate fall in the demand for strawberries.

• The demand for fruits is more price-elastic than strawerries.

• The demand for strawberries is price inelastic.

The price of Good X has increased recently from $2 to $4. As a result, the number of units supplied, which was originally 20 units, has now been raised to 30 units.

What is the price elasticity of supply of Good X?

• 0.2

• 0.5

• 1

• 2

If demand for a good is price elastic, which of the following is true?

• a rise in price will raise total revenue.

• a fall in price will raise total revenue.

• a fall in price will lower the quantity demanded

• none of the above

The Price Elasticity of Demand coefficient of a normal good tends to be

• Smaller in the long run than the short run

• Smaller in the short run than the long run

• larger in the short run than the long run

• remain constant

A product's price elasticity of demand changes from -0.8 to -0.5.

What does this mean?

• A rise in price will now cause demand to now extend.

• A rise in price will now cause total revenue to fall.

• The product will now be less responsive to changes in its price.

• The product is now more price elastic.

A product has a price elasticity of supply of 0.8, and its price is $60.

By how much does price have to increase to cause supply to rise from 200 to 240?

• $8

• $15

• $30

• $48

Which of the following is likely to have a Price Elasticity of Supply of 2?

• Canned Tuna

• Crude oil

• Commercial flights

• Exotic leather

Price Elasticity of Demand is always ________________ due to the __________________________.

• Negative;

  Law of Supply

• Negative;

  Law of Demand

• Positive;

  Price Mechanism

• Positive; Substitution Effect