#1
What is price elasticity of demand?
A measure of how much quantity demanded changes in response to a change in price
The total expenditure on a good or service
The change in quantity demanded divided by the change in income
The measure of how much quantity supplied changes in response to a change in price
#2
Which of the following is a perfectly inelastic demand?
Gasoline
Luxury cars
Smartphones
Movies
#3
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Change in price / Change in quantity demanded
Change in quantity demanded / Change in price
#4
If the price of a good increases by 10% and the quantity demanded decreases by 15%, what is the price elasticity of demand?
#5
What is the midpoint formula for calculating price elasticity of demand?
(Change in quantity demanded / Average quantity demanded) / (Change in price / Average price)
(Change in price / Average price) / (Change in quantity demanded / Average quantity demanded)
(Change in price / Change in quantity demanded) / (Average price / Average quantity demanded)
(Average quantity demanded / Change in quantity demanded) / (Average price / Change in price)
#6
What does a price elasticity of demand of 1 indicate?
Perfectly inelastic demand
Unitary elastic demand
Perfectly elastic demand
Inelastic demand
#7
What is the value of price elasticity of demand when it is perfectly elastic?
#8
What does a price elasticity of demand of -0.5 indicate?
Inelastic demand
Unitary elastic demand
Elastic demand
Perfectly elastic demand
#9
If a 10% increase in price leads to a 20% decrease in quantity demanded, what is the price elasticity of demand?
#10
What does a price elasticity of demand of zero indicate?
Perfectly elastic demand
Unitary elastic demand
Perfectly inelastic demand
Elastic demand
#11
If the cross-price elasticity of demand between two goods is positive, what does it indicate?
The goods are substitutes
The goods are complements
The demand for one good is inelastic
The demand for one good is perfectly elastic
#12
Which of the following goods is likely to have a relatively elastic demand?
Salt
Diamonds
Bottled water
Insulin
#13
What happens to total revenue when demand is inelastic and price increases?
Total revenue increases
Total revenue decreases
Total revenue remains constant
It depends on the degree of inelasticity
#14
Which of the following goods is likely to have a perfectly inelastic demand?
Gasoline
Clothing
Smartphones
Movie tickets
#15
Which of the following factors affects the price elasticity of demand?
Availability of substitutes
Income of buyers
Necessity of the good
All of the above
#16
Which of the following statements is true about perfectly elastic demand?
The price elasticity of demand is greater than 1
The demand curve is horizontal
The price elasticity of demand is less than 1
The demand curve is vertical
#17
Which of the following factors is likely to make demand more elastic?
Fewer substitutes available
The good is a necessity
Short time horizon
The good constitutes a small portion of the buyer's budget
#18
Which of the following statements is true about unitary elastic demand?
The price elasticity of demand is greater than 1
The demand curve is horizontal
The price elasticity of demand is equal to 1
The demand curve is vertical
#19
Which of the following statements is true about perfectly inelastic demand?
The price elasticity of demand is greater than 1
The demand curve is horizontal
The price elasticity of demand is equal to 1
The demand curve is vertical