WorksheetsPrice & Income Elasticity
Total questions: 23
Worksheet time: 21mins
when consumers have an urgent need for a product
the demand curve is inelastic
the demand curve is elastic
the demand curve is complementary
the demand curve is unit demand
Since the elasticity of demand is downward sloping the elasticity should always be negative.
True
False
Information not given.
The Price elasticity of milk is 1.4, therefore we can say that milk is...
Elastic
Inelastic
Unit elastic
The Price elasticity of Bread is 1, therefore we can say that bread is...
Elastic
Inelastic
Unit elastic
Petrol is inelastic on the short and the long run because...
It is very expensive.
We depend on oil to make it.
There are very few subtitutes to petrol.
Water has seen an increase in demand 8% this summer, while the price has decreased 12%
1.5 inelastic
1.5 elastic
.67 inelastic
.67 elastic
Wheat has seen a decrease in demand of 5%, while the price has increased 7%
1.4 inelastic
1.4 elastic
.71 inelastic
.71 elastic
If the income elasticity of market demand is negative, most consumers view the good as:
a luxury good
having many imperfect substitutes.
an inferior good.
) a normal good.
The graph of a demand curve that is perfectly elastic is:
positively sloped.
horizontal.
vertical
negatively sloped.
For Normal Goods, Income Elasticity of Demand will typically be ….
Negative
Positive
Both
None of these
For inferior goods, Income Elasticity of Demand will typically be...…
Positive
Negative
Both
None of these
For luxury goods, Income Elasticity of Demand will typically be.....
Positive
Negative
If the income elasticity of demand is greater than 1, the commodity is
a necessary
an Inferior
a luxury
None of these
What type of good would have an Y Elasticity of -4
Luxury
Necessity
Inferior
Most things in Aldi
What type of good would have an Y Elasticity of 0.5
Luxury
Necessity
Inferior
A person's income rises by 10%, their demand for Big Macs drops by 5%. Calculate Income elasticity of Demand.
0.5
-0.5
2
-2
During a recession, firms can expect...
A. An increase in demand for normal goods
B. An increase in demand for inferior goods
C. A decrease in demand for normal goods
D. Both B and C
Income Elasticity of Demand measures....
The responsiveness of Quantity demanded to a change in income
The responsiveness of demand to a change in income
The responsiveness of price to a change in income
The responsiveness of demand to a change in price
