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Price Elasticity of demand 2

Total questions: 30

Worksheet time: 27mins

Name
Class
Date
1.

Describe your demand for a product if you buy the same amount of it or just a small amount less after a large price increase.

a)

elastic

b)

unitary elastic

c)

inelastic

d)

hyperelastic

2.

Which of the following is an example of inelastic demand?

a)

Jason wants the most expensive cellphone. He decides to get a cheaper model.

b)

Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener.

c)

Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less.

d)

Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead.

3.

How does elasticity affect potential revenue for a firm?

a)

If demand for a good is inelastic, lowering the price could raise revenue.

b)

If demand for a good is inelastic, raising the price could reduce revenue.

c)

If demand for a good is elastic, raising the price must increase revenue.

d)

If demand for a good is elastic, raising the price could reduce revenue.

4.

Which of the following two goods is more likely to be inelastically demanded?

a)

Demand for insulin

b)

Demand for vitamins

5.

During the COVID 19 Pandemic we are all experiencing now, and the information campaign from the Center for Disease Control highlighting that bacteria and other organisms cause and spread disease, will the demand curve for soap be more elastic or more inelastic?

a)

More elastic

b)

More inelastic

6.

After more employers allow employees to telecommute, will the demand curve for cars be more elastic or more inelastic?

a)

More elastic

b)

More inelastic

7.

After the invention of nuclear power plants, will the demand curve for coal power plants be more elastic or more inelastic?

a)

More elastic

b)

More inelastic

8.

After an economic boom, will the demand curve for TVs be more elastic or more inelastic?

a)

More elastic

b)

More inelastic

9.
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
10.
which of the following is not a determinant of demand elasticity?
a)
availability of substitutes
b)
share of consumer's budget spend on good
c)
duration of adjustment period
d)
government spending
11.

What does it mean?

Ed = 0

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

12.

What does it mean?

Ed = 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

13.

What does it mean?

Ed = ∞

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

14.

What does it mean?

Ed > 1

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?

% change in Qd = % change in P

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

17.
The price elasticity of demand measures how much
a)
quantity demanded responds to a change in price.
b)
quantity demanded responds to a change in income.
c)
price responds to a change in demand.
d)
demand responds to a change in supply.
18.
Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
a)
0
b)
1
c)
6
d)
36
19.
Demand is almost always more elastic at higher prices and less elastic at lower prices.
a)
True
b)
False
20.
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 
21.
A complement example would be all except
a)
butter and margarine 
b)
peanut-butter and jelly
c)
flashlight and batteries 
d)
cameras and film 
22.
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 
23.
An increase in demand will shift the demand curve...
a)
Right 
b)
Left 
c)
no movement 
d)
no change
24.
Suppose that elasticity of demand of socks is 0.7.  If the price of socks is reduced by 10%, how will sales be effected?
a)
sales will grow by more than 10%
b)
Sales will grow by 10%
c)
Sales will grow by less than 10%
d)
Sales will decrease by 10%
25.

Oil has seen a decrease in demand of 9%, while the price has increased 13%

a)

1.44 inelastic

b)

1.44 elastic

c)

.69 inelastic

d)

.69 elastic

26.

Ford Trucks have seen a increase in demand of 27%, while the price has decreased 15%

a)

.56 inelastic

b)

.56 elastic

c)

1.8 inelastic

d)

1.8 elastic

27.

Red Wing Shoes has seen a decrease in demand of 40%, while the price has increased 20%

a)

.5 inelastic

b)

.5 elastic

c)

2 inelastic

d)

2 elastic

28.

Electricity has seen a decrease in demand of 14%, while the price has increased 18%

a)

1.3 inelastic

b)

1.3 elastic

c)

.78 inelastic

d)

.78 elastic

29.

Columbia Sports Wear has seen a decrease in demand of 57%, while the price has increased 24%

a)

.42 inelastic

b)

.42 elastic

c)

2.4 inelastic

d)

2.4 elastic

30.

The medication known as insulin has seen a decrease in demand of 2%, while the price has increased 10%

a)

5 inelastic

b)

5 elastic

c)

.2 inelastic

d)

.2 elastic

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