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    Elasticity of Demand

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    Rohit Shaw

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    © All Rights Reserved
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    Elasticity of Demand

    Uploaded by

    Rohit Shaw
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    © © All Rights Reserved

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    3 views4 pages

    Elasticity of Demand

    Uploaded by

    Rohit Shaw

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Elasticity of Demand:

    1) The slope of a demand curve depends on

    A) The units used to measure quantity but not the units used to measure price.

    B) the units used to measure price and the units used to measure quantity.

    C) the units used to measure price but not the units used to measure quantity.

    D) neither the units used to measure price nor the units used to measure quantity.

    2) The price elasticity of demand depends on

    A) the units used to measure price but not the units used to measure quantity.

    B) the units used to measure price and the units used to measure quantity.

    C) the units used to measure quantity but not the units used to measure price.

    D) neither the units used to measure price nor the units used to measure quantity.

    3) The price elasticity of demand measures

    A) the slope of a budget curve.

    B) how often the price of a good changes.

    C) the responsiveness of the quantity demanded to changes in price.

    D) how sensitive the quantity demanded is to changes in demand.

    4) When the quantity of coal supplied is measured in kilograms instead of pounds, the demand for
    coal becomes

    A) more elastic.

    B) neither more nor less elastic.

    C) less elastic.

    D) undefined.
    5) The price elasticity of demand equals

    A) the percentage change in the quantity demanded divided by the percentage change in the price.

    B) the change in the quantity demanded divided by the change in price.

    C) the percentage change in the price divided by the percentage change in the quantity demanded.

    D) the change in the price divided by the change in quantity demanded.

    6) If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent
    increase in the quantity demanded, the price elasticity of demand is

    A) 0.83.

    B) 0.30.

    C) 0.60.

    D) 1.20.

    7) A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in
    its price. The price elasticity of demand for spinach is

    A) 0.5

    B) 20.0.

    C) 2.0.

    D) 10.0.

    8) A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its
    price. The price elasticity of demand for pizza is

    A) 2.0.

    B) 10.0.

    C) 0.5.

    D) 20.0.

    9) Suppose a rise in the price of peaches from $5.50 to $6.50 per bushel decreases the quantity
    demanded from 12,500 to 11,500 bushels. The price elasticity of demand is
    A) 0.44

    B) 1000.0.

    C) 2.0.

    D) 1.0.

    10) A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded
    from 19,200 to 20,800 bushels. The price elasticity of demand is

    A) 1.25.

    B) 1.20.

    C) 8.00.

    D) 0.80.

    11) A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded
    from 18,800 to 21,200 bushels. The price elasticity of demand is

    A) 1.20.

    B) 0.80.

    C) 8.00.

    D) 1.34.

    12) When price of a good is 13 per unit, the consumer buys 11 units of that good. When price rises
    to 15 per unit, the consumer continues to buy 11 units. Calculate Price Elasticity of Demand.

    A) 0

    B) 1

    C)2.2

    D) 0.1

    13) The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________
    decrease in the quantity demanded.

    A) 10 percent

    B) 50 percent
    C) 2 percent

    D) 5 percent

    14) The price elasticity of demand can range between

    A) negative ,zero,infinite,positive

    B) zero and infinity.

    C) zero and one.

    D) negative and infinity

    15) If the price elasticity is between 0 and 1, demand is

    A) inelastic.

    B) elastic.

    C) perfectly elastic.

    D) unit elastic.

    16) Price elasticity of demand refers to shifts in the demand curve for a product.

    True or False

    17). Give the formula for measuring price elasticity of demand according to percentage
    method.

    18). Define perfectly inelastic demand.

    19). When is the demand of a commodity said to be inelastic?

    20) If price elasticity of demand for a product is equal to one, what will be the nature of its
    demand curve?

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