Elasticities
Quiz by Adrian Price
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- Q1
PED measures...
The responsiveness of Demand to a change in Price
The responsiveness of Quantity Demanded to a change in Income
The responsiveness of Supply to a change in Price
The responsiveness of Quantity Demanded to a change in Price
60s - Q2
Which of the following is not a determinant of PED?
Number of Firms
Degree of Necessity
Proportion of Income Spent on Good
Number and closeness of Substitutes
60s - Q3
Calculate the PED if the price decreases from $10 to $8 and Qd increases from 100 to 140 units.
0.5
1.5
4
2
120s - Q4
PED represents the gradient of the curve
False
True
60s - Q5
A firm has calculated the PED for a good it produces to be 1.4. In order to maximise revenues, what should the firm do?
Raise the Price
Keep the Price the same
Decrease the Price
60s - Q6
The PED for Primary Commodities tends to be...
PED <0
Unitary Elastic (PED = 1)
Relatively Inelastic (PED < 1)
Relatively Elastic (PED > 1)
60s - Q7
YED measures...
The responsiveness of supply to a change in consumers income
The responsiveness of demand to a change in Income
how increases in income leads to an increase in demand for all goods.
60s - Q8
In the Engel curve above, when income rises from $250 to $400, the YED value will be
YED>1
YED<0
YED = 0
0>YED<1
60s - Q9
A good in which the demand decreases as incomes rise is known as...
Inferior good
Veblen Good
Normal Good
Merit Good
60s - Q10
Calculate and state the YED of a good if the Qd increases by 20% as incomes rise by 50%
-2.5 Inferior good
0.4 - Necessity Good
2.3 - Necessity Good
2.5 Normal/Luxury
60s - Q11
PES measures...
The responsiveness of quantity supplied to a change in Price
The change in supply to a change in Price
The change in the number of firms to a change in Price
60s - Q12
Which of the following is not a determinant of PES
Time
Degree of Necessity
Ability to store / Unused capacity
Availability of Factors of Production
60s - Q13
In order to show PES as inelastic, we must start the supply curve on the...
Price axis
Quantity axis
Origin
60s - Q14
Which of the following best describes the determinant of spare capacity?
The ability of firms to increase output by investing in FOPs
The ability of firms to hire more labour to increase production
The ability of firms to increase output without having to increase its capital.
60s - Q15
Calculate the PES if the Price changes from $5 to $9 and the Qs increases from 100 to 300 units.
1.4 Price Elastic Supply
0.5 Price Inelastic Supply
2.5 Price Elastic Supply
0.2 Price Inelastic Supply
300s
