Elasticity and Market Concepts Quiz

What are the most commonly used measures of elasticity?

• Price elasticity of demand and price elasticity of supply

• Income elasticity of demand and cross elasticity of demand

• Price elasticity of supply and cross elasticity of demand

• Income elasticity of demand and price elasticity of supply

When does highly elastic demand occur?

• When a large percentage change in price causes a small percentage change in quantity demanded

• When a small percentage change in price causes a large percentage change in quantity demanded

• When price and quantity demanded change equally

• When there is no change in quantity demanded despite a change in price

What does the concept of elasticity measure?

• Responses to a change in the price of a good

• The total revenue of a company

• The fixed costs of production

• The market share of a company

What is price elasticity of demand?

• The percentage change in the quantity demanded of a good or service when its price changes by one percent

• The total quantity of goods sold in a market

• The change in consumer preferences over time

• The fixed cost of producing a good

Elasticity is a measure of:

• How much consumers and producers will respond to a change in market conditions

• The total cost of production

• The number of competitors in a market

• The average income of consumers

To what can the concept of elasticity be applied?

• Change in both supply and demand

• Only change in supply

• Only change in demand

• Change in government policies

If a good has highly elastic demand, what happens?

• A small percentage change in the price will cause a large percentage change in quantity demanded

• A large percentage change in the price will cause a small percentage change in quantity demanded

• The quantity demanded remains constant regardless of price changes

• The price remains constant regardless of quantity demanded changes

What does price elasticity of demand describe?

• The size of the percentage change in the quantity demanded of a good or service when its price changes by one percent

• The total revenue generated by a company

• The fixed costs associated with production

• The market share of a company

Which of the following are different measurements of elasticity?

• Price elasticity of demand, price elasticity of supply

• Cross elasticity of demand, income elasticity of supply

• Price elasticity of supply, cross elasticity of demand

• Income elasticity of demand, cross elasticity of supply

If supply and demand analysis is a measure of how, then elasticity is a measure of:

• How much

• How often

• How many

• How long