Question 1

What is elasticity of demand?

Accepted Answer

A measure of how responsive the quantity demanded of a good is to a change in its price.

Answer

A measure of the quantity demanded of a good.

Answer

The total amount of demand for a good.

Answer

A measure of how responsive the quantity supplied of a good is to a change in its price.

Answer

The price at which demand becomes zero.

Question 2

What is the formula for calculating price elasticity of demand?

Accepted Answer

Percentage change in quantity demanded divided by the percentage change in price.

Answer

Total change in quantity demanded divided by the total change in price.

Answer

Percentage change in price divided by the total change in quantity demanded.

Answer

Percentage change in price divided by the percentage change in quantity demanded.

Answer

Percentage change in quantity supplied divided by the percentage change in price.

Question 3

What is the concept of price elasticity of demand?

Accepted Answer

A measure of how sensitive the quantity demanded of a good is to changes in its price.

Answer

The total revenue generated from selling a good.

Answer

The relationship between price and quantity demanded.

Answer

The measure of how sensitive the quantity supplied of a good is to changes in its price.

Answer

The total amount of demand for a good at a specific price.

Question 4

What does it mean if the price elasticity of demand is greater than 1?

Accepted Answer

Demand is elastic.

Answer

Demand is inelastic.

Answer

There is no demand for the product.

Answer

Demand is unitary elastic.

Answer

The price and quantity demanded have no relationship.

Question 5

What is the formula for calculating income elasticity of demand?

Accepted Answer

Percentage change in quantity demanded divided by the percentage change in income.

Answer

Percentage change in income divided by the total change in quantity demanded.

Answer

Percentage change in income divided by the percentage change in quantity demanded.

Answer

Percentage change in quantity supplied divided by the percentage change in income.

Answer

Total change in quantity demanded divided by the total change in income.

Question 6

What does it mean if the price elasticity of demand is less than 1?

Accepted Answer

Demand is inelastic.

Answer

The price and quantity demanded have no relationship.

Answer

Demand is elastic.

Answer

Demand is unitary elastic.

Answer

There is no demand for the product.

Question 7

What is cross-price elasticity of demand?

Accepted Answer

A measure of how responsive the quantity demanded of one good is to a change in the price of another good.

Answer

The measure of how responsive the quantity supplied is to a change in price.

Answer

A measure of the total demand for multiple goods.

Answer

The price at which two goods have equal demand.

Answer

A measure of the consumer's sensitivity to changes in income.

Question 8

Which of the following correctly explains the concept of elasticity of demand?

Accepted Answer

A measure of the responsiveness of quantity demanded to a change in price.

Answer

A measure of the total quantity demanded at different price levels.

Answer

A measure of the responsiveness of quantity supplied to a change in price.

Answer

A measure of the maximum price consumers are willing to pay for a good.

Question 9

If the price of a product increases by 10% and the quantity demanded decreases by 15%, what can be said about the elasticity of demand?

Accepted Answer

The demand is elastic.

Answer

The demand is perfectly elastic.

Answer

The demand is unit elastic.

Answer

The demand is inelastic.

Question 10

Which of the following factors can influence the elasticity of demand for a product?

Accepted Answer

Availability of substitutes.

Answer

Cost of production.

Answer

Government regulations.

Answer

Price of raw materials.

Question 11

Which of the following statements accurately describes elastic demand?

Accepted Answer

A small change in price leads to a significant change in quantity demanded.

Answer

A large change in price leads to a small change in quantity demanded.

Answer

The demand for a product is always perfectly elastic.

Answer

Price changes have no effect on quantity demanded.

Question 12

Which of the following scenarios represents inelastic demand?

Accepted Answer

A 10% increase in price leads to a 2% decrease in quantity demanded.

Answer

A 10% decrease in price leads to a 2% decrease in quantity demanded.

Answer

A 10% increase in price leads to a 20% increase in quantity demanded.

Answer

A 10% increase in price leads to a 10% decrease in quantity demanded.

Question 13

When the price of a product increases by 20% and the quantity demanded decreases by 10%, what can be said about the elasticity of demand?

Accepted Answer

The demand is inelastic.

Answer

The demand is elastic.

Answer

The demand is unit elastic.

Answer

The demand is perfectly elastic.

Question 14

Which of the following factors can affect the elasticity of demand for a product?

Accepted Answer

Availability of close substitutes.

Answer

The brand image of the product.

Answer

The color of the product.

Answer

The packaging of the product.

Question 15

Which of the following is a characteristic of elastic demand?

Accepted Answer

A small change in price leads to a proportionally larger change in quantity demanded.

Answer

A large change in price leads to a small change in quantity demanded.

Answer

Price changes have no effect on quantity demanded.

Answer

The demand for a product is always perfectly elastic.

Question 16

Which of the following is an example of perfectly elastic demand?

Accepted Answer

Consumers stop buying a good when its price increases by even a small amount.

Answer

Consumers increase their demand when the price of a good decreases.

Answer

Consumers continue to buy the same quantity regardless of price changes.

Answer

Consumers are willing to pay any price for a good.

Question 17

How is the concept of price elasticity of demand calculated?

Accepted Answer

Percentage change in quantity demanded divided by the percentage change in price.

Answer

Ratio of quantity demanded to the price of the product.

Answer

Total change in quantity demanded divided by the total change in price.

Answer

Percentage change in price divided by the percentage change in quantity demanded.

Question 18

What does a price elasticity of demand of 0.5 indicate?

Accepted Answer

Inelastic demand

Answer

Elastic demand

Answer

No demand

Answer

Unitary elastic demand

Answer

Perfectly elastic demand

Question 19

What factors can affect the elasticity of demand?

Accepted Answer

Availability of substitutes, necessity of the product, time period, income level

Answer

Market demand, supply chain, price fluctuations, business cycles

Answer

Government regulations, inflation, population demographics, technology advancements

Answer

Market size, competition, advertising, production costs

Answer

Brand reputation, product quality, customer preferences, distribution channels

Question 20

What is the difference between elastic and inelastic demand?

Accepted Answer

Elastic demand is when quantity demanded is highly responsive to price changes, whereas inelastic demand is when quantity demanded is not very responsive to price changes.

Answer

Elastic demand is when quantity demanded is not responsive to price changes, whereas inelastic demand is when quantity demanded is highly responsive to price changes.

Answer

Elastic demand means there is no demand for a product, while inelastic demand means there is high demand.

Answer

Elastic demand indicates a perfectly responsive market, while inelastic demand indicates a stagnant market.

Answer

Elastic demand refers to the total quantity demanded, while inelastic demand refers to the demand for a specific product.

Question 21

What is cross elasticity of demand?

Accepted Answer

A measure of responsiveness of quantity demanded for one product to changes in the price of another product

Answer

The amount of demand for a specific product

Answer

The total quantity demanded for a product

Answer

The level of demand in the market

Answer

The change in quantity demanded due to changes in income

Question 22

What is the income elasticity of demand?

Accepted Answer

A measure of responsiveness of quantity demanded to changes in income

Answer

The level of demand in the market

Answer

The total quantity demanded for a product

Answer

A measure of responsiveness of quantity demanded to changes in price

Answer

The amount of demand for a specific product

Question 23

What does a price elasticity of demand of greater than 1 indicate?

Accepted Answer

Elastic demand

Answer

Perfectly elastic demand

Answer

Inelastic demand

Answer

No demand

Answer

Unitary elastic demand

Question 24

Which of the following goods is likely to have an inelastic demand?

Accepted Answer

Prescription medication

Answer

Smartphones

Answer

Books

Answer

Clothing

Question 25

Which of the following statements best describes the concept of cross elasticity of demand?

Accepted Answer

It measures the responsiveness of quantity demanded of one good to a change in the price of another good

Answer

It measures the responsiveness of quantity supplied to a change in income

Answer

It measures the responsiveness of quantity supplied to a change in price

Answer

It measures the responsiveness of quantity demanded to a change in income

Question 26

Which of the following statements best describes the concept of price elasticity of demand?

Accepted Answer

It measures the responsiveness of quantity demanded to a change in price

Answer

It measures the responsiveness of quantity supplied to a change in price

Answer

It measures the responsiveness of quantity demanded to a change in income

Answer

It measures the responsiveness of quantity supplied to a change in income

Question 27

Which of the following is an example of elastic demand?

Accepted Answer

Luxury cars

Answer

Toilet paper

Answer

Salt

Answer

Electricity

Question 28

What is the formula to calculate the price elasticity of demand?

Accepted Answer

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

Answer

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

Answer

Percentage change in price divided by the percentage change in income

Answer

Percentage change in income divided by the percentage change in price

Question 29

Which of the following goods is likely to have a high price elasticity of demand?

Accepted Answer

Soft drinks

Answer

Toilet paper

Answer

Medicine

Answer

Salt

Question 30

Which of the following factors does not affect the elasticity of demand?

Accepted Answer

Availability of substitutes

Answer

Income level of consumers

Answer

Time available for adjustment

Answer

Number of close substitutes

Question 31

What is the effect of an increase in price on the quantity demanded for a perfectly elastic good?

Accepted Answer

No change

Answer

Decrease in quantity demanded

Answer

Total cessation of demand

Answer

Increase in quantity demanded

Question 32

Which of the following factors does not affect the elasticity of demand?

Accepted Answer

Price of complementary goods

Answer

Necessity of the good

Answer

Availability of substitutes

Answer

Time period

Question 33

Which of the following factors is NOT a determinant of the price elasticity of demand?

Accepted Answer

Advertising expenditure

Answer

Income level of consumers

Answer

Time period for adjustment

Answer

Availability of close substitutes

Question 34

Which of the following goods is likely to have an inelastic demand?

Accepted Answer

Salt

Answer

Smartphones

Answer

Airline tickets

Answer

Fresh vegetables

Question 35

What type of demand is characterized by a small change in quantity demanded in response to a change in price?

Accepted Answer

Inelastic demand

Answer

Perfectly elastic demand

Answer

Unitary demand

Answer

Elastic demand

Question 36

Which of the following is an example of a perfectly elastic demand?

Accepted Answer

C

Answer

C: Luxury cars

Answer

A: Salt

Answer

B: Electricity

Answer

D: Medicines

Question 37

Which of the following goods is likely to have an inelastic demand?

Accepted Answer

D

Answer

C: Smartphones

Answer

B: Movie tickets

Answer

A: Bottled water

Answer

D: Prescription drugs

Question 38

Demand is inelastic for _________

Accepted Answer

luxury goods

Answer

necessary goods

Answer

normal goods

Answer

substitute goods

Question 39

When the percentage change in quantity demanded is equal to percentage change in price then it is called

Accepted Answer

unit elastic

Answer

relatively inelastic

Answer

relatively elastic

Answer

unique elastic

Question 40

from the following goods , demand for which is inelastic?

Accepted Answer

Both matchboxes and rice in West Bengal

Answer

<P>matchboxes</P>

Answer

Rice in West Bengal

Answer

Rolex watches

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