#1
What is price elasticity of demand?
The measure of the responsiveness of quantity demanded to a change in price
The measure of the responsiveness of price to a change in quantity demanded
The measure of the total demand for a product
The measure of the total supply of a product
#2
If a 10% decrease in price leads to a 20% increase in quantity demanded, what is the price elasticity of demand?
#3
What is the price elasticity of supply?
The measure of the responsiveness of quantity supplied to a change in price
The measure of the responsiveness of price to a change in quantity supplied
The measure of the total supply for a product
The measure of the total demand for a product
#4
Which of the following products is likely to have the most elastic demand?
Salt
Insulin
Luxury cars
Bread
#5
What does a price elasticity of demand of 0.5 indicate?
Unit elastic demand
Inelastic demand
Elastic demand
Perfectly elastic demand
#6
What is the formula to calculate price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total quantity demanded / Total price
Total price / Total quantity demanded
#7
If the price elasticity of demand for a product is -1.5, what does this imply?
The demand is perfectly elastic
The demand is perfectly inelastic
The demand is relatively elastic
The demand is relatively inelastic
#8
What does it mean if the price elasticity of demand is perfectly inelastic?
A change in price leads to an infinitely small change in quantity demanded
A change in price leads to no change in quantity demanded
A change in quantity demanded leads to no change in price
Quantity demanded is not affected by price changes
#9
Which of the following factors does NOT affect the price elasticity of demand?
Availability of substitutes
Necessity of the product
Time horizon
Price of complementary goods
#10
If the price of a product increases by 10% and the quantity demanded decreases by 5%, what is the price elasticity of demand?
#11
If the cross-price elasticity of demand between two products is positive, what does it indicate about the products?
They are complements
They are substitutes
They are unrelated
They are normal goods
#12
If a product has an income elasticity of demand of 0.8, what does this mean?
It is a normal good
It is an inferior good
It is a luxury good
It is an elastic good
#13
What is the relationship between price elasticity of demand and total revenue?
They have a direct relationship
They have an inverse relationship
They are unrelated
It depends on the elasticity coefficient
#14
If the price elasticity of demand for a product is greater than 1, the demand is considered:
Inelastic
Elastic
Perfectly inelastic
Perfectly elastic
#15
Which of the following statements about perfectly elastic demand is true?
Consumers are willing to pay any price for the good
A small change in price leads to a large change in quantity demanded
Consumers are not sensitive to changes in price
The demand curve is vertical