Demand & Elasticity Quiz

In North America the cross elasticity of demand for coffee with respect to a change in the price of milk was estimated to be –0.04. Which one of the following can be deduced from this information?

• Coffee and milk are inferior goods

• Coffee and milk are substitute goods

• Coffee and milk are unrelated goods

• Coffee and milk are complementary goods

The diagram shows the demand curve for bottled energy drinks. Which one of the following points has the value of –1 for price elasticity of demand?

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In 2022 average house prices in China decreased by 2.1%. Research into the housing market in China estimated that the price elasticity of supply for new houses was 2.8. Ceteris paribus, which one of the following can be deduced from this information?

• The supply of new houses would decrease by 5.88%

• The supply of new houses would increase by 5.88%

• The supply of new houses would increase by 1.33%

• The supply of new houses would decrease by 1.33%

The cross elasticity of demand for Pepsi Cola with respect to a change in the price of Coca-Cola is estimated to be +0.62 in North America. Which one of the following can be deduced from this information?

• Pepsi Cola and Coca-Cola are complements

• Pepsi Cola and Coca-Cola are substitutes

• Pepsi Cola and Coca-Cola are unrelated goods

• Pepsi Cola and Coca-Cola are normal goods

The table shows the estimated price elasticity of demand for different car types in Norway. Which one of the following can be deduced from the table?

• Demand for all three car types is price inelastic

• Demand for all three car types is price elastic

• An increase in the price of diesel cars will result in an increase in the total revenue for diesel car manufacturers

• An increase in the price of electric cars will result in an increase in the total revenue for electric car manufacturers

The diagram illustrates the relationship between the price of PlayStation 5 games consoles and the quantity demanded of Xbox Series X games consoles. Which one of the following can be deduced from the diagram about the relationship between PlayStation 5 games consoles and Xbox Series X games consoles?

• They are substitutes

• They are complements

• They are unrelated goods

• They are inferior goods

It was estimated that the price elasticity of demand for cereals was –0.6 and for fruit it was –0.7. Which one of the following factors is most likely to cause demand for a product to be price inelastic?

• There are legal constraints on manufacturing the product

• There are large stocks of the product available

• The product has many substitutes

• The product lacks substitutes

The table shows the quantity of shirts that would be sold at different selling prices by a textile manufacturer based in Botswana. Which one of the following would be the textile manufacturer’s marginal revenue if the price was reduced from $16 to $14?

• $0

• $4

• $12

• $14

In Australia the elasticity of demand for construction workers is estimated to be –0.18. Which one of the following factors is the most likely explanation of this elasticity of demand for construction workers?

• The construction workers cannot be easily replaced by capital

• The costs of employing construction workers are low

• The productivity of construction workers is low

• The majority of construction workers are members of trade unions

In 2022 the average price of a standard cinema ticket in Johannesburg, South Africa, was R60 in the daytime and R105 in the evening. Which one of the following is the most likely reason for this price difference?

• The demand for cinema tickets is more price inelastic in the daytime than in the evening

• The demand for cinema tickets is more price elastic in the daytime than in the evening

• The supply of cinema tickets is perfectly price elastic

• The supply of cinema tickets is more price elastic in the evening than in the daytime