#1
Which of the following statements best defines demand elasticity?
The responsiveness of quantity demanded to changes in price.
The total amount of demand in the market.
The rate at which demand changes over time.
The elasticity of supply in response to changes in demand.
#2
Which formula represents the price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Percentage change in price x Percentage change in quantity demanded
Percentage change in quantity demanded - Percentage change in price
#3
What does a negative price elasticity of demand indicate?
Demand is perfectly elastic.
Demand is inelastic.
Demand is unitary elastic.
Demand is negatively related to price.
#4
What is the slope of a linear demand curve with perfectly elastic demand?
#5
If a 10% decrease in price leads to a 20% increase in quantity demanded, what is the price elasticity of demand?
#6
When demand is perfectly elastic, what does this imply?
A small change in price leads to a large change in quantity demanded.
A large change in price leads to a small change in quantity demanded.
Changes in price have no effect on quantity demanded.
Quantity demanded is always zero.
#7
If the price of a product increases by 10% and the quantity demanded decreases by 5%, what is the price elasticity of demand?
#8
What does it mean when the price elasticity of demand is greater than 1?
Demand is inelastic.
Demand is perfectly elastic.
Demand is unitary elastic.
Demand is elastic.
#9
If the price of a product increases by 10% and the quantity demanded remains unchanged, what is the price elasticity of demand?
#10
Which of the following factors is likely to make demand for a product more elastic?
Availability of close substitutes.
Necessity of the product.
The proportion of income spent on the product.
Time period considered for the analysis.
#11
In which scenario would demand be considered inelastic?
When consumers have ample time to adjust their consumption habits.
When the price of the product changes proportionately more than the quantity demanded.
When consumers consider the product a necessity rather than a luxury.
When the price elasticity of demand is less than 1.
#12
If the price of gasoline increases and the quantity demanded decreases only slightly, what can be inferred about the demand for gasoline?
Demand is elastic.
Demand is inelastic.
Demand is perfectly elastic.
Demand is perfectly inelastic.
#13
Which factor is NOT a determinant of the price elasticity of demand?
Availability of substitutes.
Necessity of the good.
Proportion of income spent on the good.
The amount of advertising for the good.
#14
If the price elasticity of demand for a product is -0.5, how will a 10% increase in price affect quantity demanded?
Quantity demanded will increase by 5%.
Quantity demanded will decrease by 5%.
Quantity demanded will increase by 10%.
Quantity demanded will decrease by 10%.