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Theme 1 - Markets - Demand Elasticities
Quiz by Mark Seccombe
​From the data it may be concluded that a 10% rise in real incomes would lead to
a fall in demand for holidays in China
a 2% increase in demand for holidays in Spain
no change in demand for holidays in Peru
a 14% increase in demand for holidays in Italy
From the data it may be concluded that a 10% rise in real incomes would lead to
Which one of the following situations would lead to an increase in equilibrium price?
The cross elasticity of demand between two complementary products is always
Given a fare reduction of 35%, what would be the expected percentage rise in demand for those flights if the company has estimated their price elasticity of demand is -2.0
When demand is income inelastic, the percentage change in
The cross elasticity of demand for Y with respect to the price of X when the price of X falls from 10 to 9 is
The marketing department of a company manufacturing and selling washing machines has found that its product has a price elasticity of demand equal to -0.75. This suggests that if the company raises the price of washing machines
A government grants producers a subsidy for a product. Which one of the following is likely to result in the largest increase in its sales?
Cross elasticity of demand is defined as the
The table shows the cross elasticities of demand for the products of four companies with respect to the prices of their closest substitutes.
All other things being equal, which one of the above companies is most likely to possess the greatest market power?
Which one of the following combinations is true for a normal good which has a downward sloping demand curve?
The price elasticity of demand for a good made by a firm is –0.6. If the firm raises the price of the good, its revenues will
In August 2000, the World Health Organisation said that a 10% increase in cigarette prices worldwide would reduce consumption of cigarettes by 4% in high-income countries and by 8% in low-income countries.
If the fares charged for the use of each of these forms of transport rose by the same percentage, which type of provider would see the greatest proportional increase in total sales
The essential feature of an inferior good is that its
From the diagram it can be inferred that the price elasticity of demand for mobile phones when their price falls from £80 to £60 is
Which one of the following measures of elasticity indicates that two goods are substitutes?
The income elasticity of demand for a good is −3. Which one of the following statements is correct?
An economy in which average incomes have fallen by 5% has also seen the demand for holidays overseas fall by 20%. It can be concluded from this that the income elasticity of demand for holidays overseas is
An increase in the cost of raw materials used in the production of the good shifts the supply curve from S1 to S2. What is the price elasticity of demand for the good between E1 and E2?
