#1
2. Which factor does NOT affect the elasticity of demand?
Availability of substitutes
Necessity of the good
Time period considered
Consumer preferences
#2
10. What is the key determinant of the elasticity of supply?
Technology
Market competition
Time period
Government regulations
#3
20. The concept of elasticity is equally applicable to both demand and:
Production
Supply
Profit
Consumer surplus
#4
1. What is elasticity of demand?
The measure of responsiveness of quantity demanded to a change in price
The measure of government intervention in the market
The measure of total market demand
The measure of consumer income
#5
3. If the cross-price elasticity of two goods is positive, it indicates that they are:
Complementary goods
Substitute goods
Inferior goods
Normal goods
#6
5. The concept of income elasticity of demand is important in understanding the impact of changes in:
Consumer preferences
Consumer income
Market competition
Production costs
#7
7. In the context of elasticity, what does the term 'unitary elastic' mean?
Percentage change in quantity demanded equals percentage change in price
Percentage change in quantity demanded is greater than percentage change in price
Percentage change in quantity demanded is less than percentage change in price
No change in quantity demanded regardless of price change
#8
9. The concept of cross-price elasticity is particularly relevant for which type of goods?
Normal goods
Inferior goods
Complementary goods
Substitute goods
#9
4. What is the formula for calculating the price elasticity of demand?
PED = (Q2 - Q1) / (P2 - P1)
PED = (P2 - P1) / (Q2 - Q1)
PED = Q1 / P1 * Q2 / P2
PED = (Q1 - Q2) / (P1 - P2)
#10
6. What does a perfectly elastic demand curve look like?
Horizontal line
Vertical line
U-shaped curve
Downward-sloping curve
#11
8. If the price of a good increases by 10% and the quantity demanded decreases by 5%, what is the price elasticity of demand?
#12
12. Which of the following is an example of a necessity with an inelastic demand?
Luxury cars
Bottled water
Designer clothing
Entertainment systems
#13
14. How does the elasticity of demand vary along a linear demand curve?
Constant
Increases
Decreases
Varies randomly