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Demand and Elasticity

Total questions: 25

Worksheet time: 19mins

Name
Class
Date
1.
An increase in the number of consumers can cause 
a)
the demand curve to shift left
b)
the demand curve to shift right 
c)
the demand curve to shift up
d)
diminishing returns 
2.
when consumers have a need for a product that is urgent 
a)
the demand curve is inelastic 
b)
the demand curve is elastic 
c)
the demand curve is complementary 
d)
the demand curve is unit demand 
3.
When replacing a certain item with with a less costly item is an example of
a)
the substitution effect 
b)
the income effect 
c)
demand elasticity 
d)
complements 
4.
A city's transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, 1) the # of people riding buses & subways AND 2) the city's revenues will change in which way (respectively)?
a)
1) Increase; 2)Increase
b)
1) Decrease; 2) Increase
c)
1) Decrease; 2) Decrease
d)
1) No Change; 2) Increase
5.
Demand is unit elastic if it is less than 1.0
a)
True
b)
False
6.
If the price on a product goes up the quantity demanded will go down. This follows the economic theory of:
a)
Law of Demand
b)
elasticity
c)
income effect
d)
None of the above
7.
The formula for calculating elasticity of demand is:
a)
The % change in price over the % change in quantity demanded
b)
The % change in quantity demanded over the % change in price
c)
The change in price over the change in quantity demaned
d)
The change in quantity demanded over the change in price
8.
The elasticity of demand for tissues is 0.66. This means the demand for tissues is
a)
elastic
b)
unit elastic
c)
inelastic
d)
really expensive
9.
The following is a factor that will not cause the demand curve to shift:
a)
Advertising
b)
Population
c)
Price
d)
Consumer expectations
10.
Consuming more of one good because of a change in price of another good is known as the 
a)
income effect
b)
substitution effect
c)
elasticity effect
d)
demand effect
11.
Which factor causes the demand curve to shift in the following situation: Bobby graduated from college and got a good job, so he decided to buy a new 2016 Passat.
a)
income
b)
population
c)
consumer tastes & advertising
d)
prices of related goods
12.

What does it mean?

Ed = 0

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

13.

What does it mean?

Ed = 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

14.

What does it mean?

Ed = ∞

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

15.

What does it mean?

Ed > 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

16.

What does it mean?

Ed < 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

17.

Which of these best describes the law of demand?

a)

if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

b)

if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

c)

there is no law of demand, each situation is unique and demand and prices cannot be predicted

d)

prices will go up for certain goods when quantity demanded goes up and vice versa

18.

Elasticity refers to

a)

how producers of goods and services react to price changes

b)

how consumers of goods and services react to price changes

c)

how far a supply of scarce goods can be stretched

d)

how often the price of a good or service changes when quantity demanded changes

19.

Which of these demonstrates elastic demand?

a)

a sharp increase in the price of milk causes a large drop in the quantity demanded for milk

b)

the price of homes steadily increase but the quantity demanded for homes does not change

c)

car dealerships cut prices to clear out previous year models and consumers rush to dealerships to take advantage of the sales

d)

gas prices increase in the summer as more people want to go on road trips but the increases do not deter people from buying less gas

20.

Which of these demonstrates inelastic demand? (multiple answers)

a)

a cold snap destroys an apple crop causing prices to jump, however, people still buy apples and quantity demanded does not change

b)

Super Bowl tickets hit record high prices but are still sold out in a matter of minutes and starting going for even higher prices on resale sites

c)

concert tickets are not selling well, so the venue drops prices by 80%; the tickets sell out shortly thereafter

d)

a restaurant starts charging a $10 delivery fee, delivery orders drop by 50% in the first month

21.

Which of these shows a decrease in the quantity demanded?

a)
b)
c)
d)
22.

Which of these shows an increase in the quantity demanded?

a)
b)
c)
d)
23.

Which of these demonstrates inelastic demand?

a)
b)
c)
d)
24.
If the price on a product goes up the quantity demanded will go down. This follows the economic theory of:
a)
Law of Demand
b)
elasticity
c)
income effect
d)
None of the above
25.
Which factor causes the demand curve to shift in the following situation: Bobby graduated from college and got a good job, so he decided to buy a new 2016 Passat.
a)
income
b)
population
c)
consumer tastes & advertising
d)
prices of related goods

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