#1
What does price elasticity of demand measure?
The change in quantity demanded in response to a change in price
The change in price in response to a change in quantity demanded
The total revenue generated by a product
The average price of a good over a period of time
#2
If the price elasticity of demand for a good is greater than 1, it is considered:
Inelastic
Elastic
Unitary elastic
Perfectly elastic
#3
What does the price elasticity of demand tell us about the responsiveness of quantity demanded to a change in price?
It measures the percentage change in quantity demanded relative to the percentage change in price.
It measures the percentage change in price relative to the percentage change in quantity demanded.
It measures the total revenue generated by the product.
It measures the average price of the good over a period of time.
#4
If the price elasticity of demand for a good is greater than 1, what does this suggest about demand?
Demand is inelastic.
Demand is elastic.
Demand is unitary elastic.
Demand is perfectly elastic.
#5
What is the formula for price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Change in quantity demanded / Change in price
Change in price / Change in quantity demanded
#6
What does a price elasticity of demand of 0 imply?
Perfectly inelastic demand
Perfectly elastic demand
Unitary elastic demand
No change in quantity demanded with a change in price
#7
What does the cross-price elasticity of demand measure?
The change in quantity demanded of one good in response to a change in the price of another good
The change in price of one good in response to a change in the quantity demanded of another good
The change in total revenue of one good in response to a change in the price of another good
The change in consumer surplus of one good in response to a change in the price of another good
#8
If the price of a good increases by 10% and the quantity demanded decreases by 5%, what is the price elasticity of demand?
#9
Which of the following goods is likely to have the most inelastic demand?
Bottled water
Luxury cars
Salt
Smartphones
#10
What is the main determinant of the price elasticity of demand for a good?
The price level
The income level of consumers
The availability of substitutes
The number of producers in the market
#11
If the price of gasoline increases by 20% and the quantity demanded decreases by 10%, what is the price elasticity of demand?
#12
What is the income elasticity of demand for a normal good?
Positive
Negative
Zero
Infinite
#13
Which of the following is an example of a product with elastic demand?
Prescription drugs
Insulin
Salt
Designer handbags
#14
What happens to total revenue when demand is elastic and price decreases?
Total revenue increases
Total revenue decreases
Total revenue remains constant
Total revenue may increase or decrease
#15
What does the coefficient of price elasticity of supply measure?
The change in quantity supplied in response to a change in price
The change in price in response to a change in quantity supplied
The total revenue generated by a product
The average price of a good over a period of time
#16
If the price elasticity of supply for a good is less than 1, it is considered:
Inelastic
Elastic
Unitary elastic
Perfectly elastic
#17
What is the formula for price elasticity of supply?
Percentage change in quantity supplied / Percentage change in price
Percentage change in price / Percentage change in quantity supplied
Change in quantity supplied / Change in price
Change in price / Change in quantity supplied
#18
What does a price elasticity of supply of 0 imply?
Perfectly inelastic supply
Perfectly elastic supply
Unitary elastic supply
No change in quantity supplied with a change in price
#19
Which factor typically determines the elasticity of demand for a product?
Availability of substitutes
Time horizon
Consumer preferences
Number of producers in the market
#20
Which factor typically determines the elasticity of supply for a product?
Availability of substitutes
Time horizon
Consumer preferences
Number of producers in the market
#21
Which of the following represents perfectly elastic demand?
Ed = -∞
Ed = 0
Ed = 1
Ed = 1/2
#22
What does a price elasticity of supply greater than 1 indicate?
Perfectly inelastic supply
Inelastic supply
Unitary elastic supply
Elastic supply