Elasticity of Demand and Supply Quiz

Test your knowledge on elasticity with questions covering price, income, and cross-price elasticity, and their impacts on demand and supply.

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What does the price elasticity of demand measure?

The percentage change in quantity demanded divided by the percentage change in price

The percentage change in price divided by the percentage change in quantity demanded

The total revenue change divided by the quantity demanded

The percentage change in quantity demanded

The percentage change in price

What type of goods have a price elasticity of demand greater than 1?

Inferior goods

Normal goods

Luxury goods

Unitary elastic goods

Elastic goods

When the percentage change in quantity supplied is less than the percentage change in price, what type of supply exists?

Perfectly elastic supply

Elastic supply

Unitary elastic supply

Inelastic supply

Perfectly inelastic supply

What does the income elasticity of demand measure?

The percentage change in quantity demanded divided by the percentage change in income

The percentage change in income divided by the percentage change in quantity demanded

The total revenue change divided by the income

The percentage change in quantity demanded

The percentage change in income

In which scenario would the cross-price elasticity of demand be positive?

When two goods are substitutes

When two goods are complements

When the price of one good decreases and the quantity demanded of the other good decreases

When the price of one good increases and the quantity demanded of the other good increases

When the price of one good decreases and the quantity demanded of the other good increases

Which of the following factors does NOT affect the price elasticity of demand?

Availability of substitutes

Degree of necessity

Proportion of income spent on the good

Time horizon

Government regulations

What does a perfectly elastic supply curve look like?

A vertical line

A horizontal line

A downward sloping line

A straight line with a negative slope

A curve with varying elasticity

What is the formula for calculating cross-price elasticity of demand?

(Percentage change in quantity demanded of Good A / Percentage change in price of Good A) * (Percentage change in price of Good B / Percentage change in quantity demanded of Good B)

(Percentage change in price of Good A / Percentage change in quantity demanded of Good A) * (Percentage change in quantity demanded of Good B / Percentage change in price of Good B)

(Percentage change in price of Good A / Percentage change in price of Good B) * (Percentage change in quantity demanded of Good A / Percentage change in quantity demanded of Good B)

(Percentage change in quantity demanded of Good A / Percentage change in quantity demanded of Good B) * (Percentage change in price of Good A / Percentage change in price of Good B)

(Percentage change in price of Good A * Percentage change in quantity demanded of Good B) / (Percentage change in quantity demanded of Good A * Percentage change in price of Good B)

Which of the following statements about perfectly inelastic demand is true?

The quantity demanded remains constant regardless of changes in price

The percentage change in quantity demanded equals the percentage change in price

The price elasticity of demand is zero

The demand curve is vertical

The demand curve is horizontal

#10

What happens to total revenue when demand is elastic and price increases?

Total revenue decreases

Total revenue increases

Total revenue remains constant

Total revenue fluctuates

Total revenue cannot be determined

Elasticity of Demand and Supply Quiz

What does the price elasticity of demand measure?

What type of goods have a price elasticity of demand greater than 1?

When the percentage change in quantity supplied is less than the percentage change in price, what type of supply exists?

What does the income elasticity of demand measure?

In which scenario would the cross-price elasticity of demand be positive?

Which of the following factors does NOT affect the price elasticity of demand?

What does a perfectly elastic supply curve look like?

What is the formula for calculating cross-price elasticity of demand?

Which of the following statements about perfectly inelastic demand is true?

What happens to total revenue when demand is elastic and price increases?

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