ELASTICITY

If two goods are substitutes, an increase in the price of one good will ...

• decrease the quantity demanded for the other good.

• decrease the demand for the other good.

• increase the demand for the other good.

• increase the quantity demanded for the other good.

In the market of tea, we can consider ...

• milo as complementary good.

• sugar as complementary good.

• chocolate as substitutes good.

• milo as unrelated good.

If the supply for a product is elastic, the coefficient of price elasticity of supply is ...

• zero.

• greater than one.

• equal to one.

• less than one.

The price of a plate of brownies increases by 25 per cent and the quantity demanded of brownies falls by 29 per cent. This indicates that demand for brownies is ...

 

• elastic.

• inelastic.

• unitary elastic.

• perfectly elastic.

When income is RM1600, the quantity demanded for Good A is 400 kg. When income is RM2000, quantity demanded for Good A is 200 kg. Calculate income elasticity for Good A when income increases from RM1600 to RM2000.

• -2

• 2

• 1.75

• -1.75

Good with coefficient of income elasticity of demand that is less than 0 is referring to ...

• normal goods.

• luxury goods.

• inferior goods.

• necessity goods.

Which of the following is giffen goods?

•  

  Luxury cars

• Used cars

• Antique furniture

• Gold & jewelry

Tennis racket & petrol are the example of complementary goods.

• True

• False

The percentage change in price of insulin for diabetic patients has no effect on the percentage changes in quantity demanded for the insulin.

• True

• False

If the demand is inelastic, the coefficient of income elasticity of demand is ...

• normal goods.

• luxury goods.

• inferior goods.

• necessity goods.