Elasticity of Demand and Supply Quiz

What is price elasticity of demand?

• Price elasticity of demand measures the quality of a product

• Price elasticity of demand has no impact on consumer behavior

• Price elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in the price of that good.

• Price elasticity of demand only applies to luxury goods

What is income elasticity of demand?

• Income elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in consumer income.

• Income elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in population

• Income elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in government policies

• Income elasticity of demand measures the price change of a good in response to consumer income

What is cross elasticity of demand?

• Measure of the responsiveness of the quantity demanded of one good to a change in the price of another good

• The amount of elasticity in a cross-shaped demand curve

• The ratio of demand for two unrelated goods

• The measure of demand for a product in different countries

What are the determinants of elasticity of demand?

• Availability of substitutes, necessity or luxury, proportion of income spent, time period, and definition of the market

• Color of the product, brand popularity, weather conditions

• Quality of customer service, packaging, and advertising

• Customer's age, gender, and occupation

How do you calculate price elasticity of demand?

• By multiplying the percentage change in quantity demanded by the percentage change in price.

• By subtracting the percentage change in quantity demanded from the percentage change in price.

• By adding the percentage change in quantity demanded to the percentage change in price.

• By dividing the percentage change in quantity demanded by the percentage change in price.

How do you calculate income elasticity of demand?

• By adding the percentage change in quantity demanded to the percentage change in income.

• By multiplying the percentage change in quantity demanded by the percentage change in income.

• By subtracting the percentage change in quantity demanded from the percentage change in income.

• By dividing the percentage change in quantity demanded by the percentage change in income.

How do you calculate cross elasticity of demand?

• By adding the percentage change in quantity demanded of one good to the percentage change in the price of another good.

• By multiplying the percentage change in quantity demanded of one good with the percentage change in the price of another good.

• By dividing the percentage change in quantity demanded of one good by the percentage change in the price of another good.

• By subtracting the percentage change in quantity demanded of one good from the percentage change in the price of another good.

What are the factors that determine the price elasticity of supply?

• Color of the product, brand popularity, and consumer income

• Time period, availability of inputs, and flexibility of production processes

What are the factors that determine the income elasticity of supply?

• Education level, unemployment rate, and social media influence

• Availability of resources, technology, time period, and ability to shift production

• Government regulations, exchange rates, and inflation

• Weather conditions, political stability, and consumer preferences

What are the factors that determine the cross elasticity of supply?

• Government regulations, consumer income, market competition

• Quality of the product, advertising strategies, brand loyalty

• Availability of substitute goods, time period, flexibility of production processes

• Price of the product, demand for the product, cost of production