6 IE MCQ Quiz

Price elasticity of supply is the responsiveness of

• demand to a change in price.

• price to a change in supply.

• quantity supplied to a change in price.

• price to a change in supply.

If the supply curve of a product is vertical, PES is equal to

• 0.

• 1.

• -1.

• infinity.

If storage of a good is cheap and readily available, supply is likely to be

• relatively elastic.

• relatively inelastic.

• perfectly inelastic.

• perfectly elastic.

If the price of a product doubled and in response the quantity supplied also doubled then the PES is equal to

• 1

• -1

• 2

• o

The formula for calculating elasticity of demand is:

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

What does it mean?

PED = 0

• Perfectly inelastic demand

• Inelastic demand

• Unitarily elastic demand

• Elastic demand

• Perfectly elastic demand

What does it mean?

PED = 1

• Perfectly inelastic demand

• Inelastic demand

• Unitarily elastic demand

• Elastic demand

• Perfectly elastic demand

What does it mean?

PED = ∞ (infinity)

• Perfectly inelastic demand

• Inelastic demand

• Unitarily elastic demand

• Elastic demand

• Perfectly elastic demand

What does it mean?

PED > 1

• Perfectly inelastic demand

• Inelastic demand

• Unitarily elastic demand

• Elastic demand

• Perfectly elastic demand

What does it mean?

0 < PED < 1

• Perfectly inelastic demand

• Inelastic demand

• Unitarily elastic demand

• Elastic demand

• Perfectly elastic demand