# elasticity of demand mcq with answer

d) All of the above affect the own-price elasticity of demand. 6. Which of the following statements about price elasticity of supply is valid? c) e + b + d. 7. If a price floor of \$20 is introduced, then which area will represent the deadweight loss? Demand analysis objective Fill in the blanks Multiple choice Questions Demand analysis. Use the diagram below to answer the following TWO questions. d) P = 0; Q = 20. If a \$6 per unit tax is introduced in this market, then the new equilibrium quantity will be: a) 20 units. 3. b) Price ceilings make buyers better off. c) I, II, and III. c) Lower incomes for providers of medical services. Where it is predicted that the proportion of income spent on food declines as income rises. c) A quota. c) I, II, and III. B. a positive number. If a tariff of \$10 per unit is introduced, by how much to imports decrease? 7. The deadweight loss is zero. b) The supply of that good will be relatively inelastic, compared to goods for which there are many close substitutes. A Elasticity of demand is 0. Which of the following is also known as International Bank for Reconstruction and Development? b) 1. d) Both a) and b) are true. d) I and III only. E. If a 5 per cent decrease in the price of rice results in a 2 per cent decrease in the quantity of rice demanded, the price elasticity of the demand for rice is greater than one. A There is a transfer of income from consumers to the monopolist, B There is welfare loss as resources tend to be misallocated under monopoly. If, when the price of a product rises from \$1.50 to \$2, the quantity demanded of the product decreases from 1000 to 900, the price elasticity of demand coefficient using the midpoint formula is a. And Supply Elasticity Questions Answersthe demand for food is elastic D. reduce total revenue to farmers as a whole because the demand for food is inelastic Elasticity Mcqs for Preparation - PakMcqs A change in the price of a commodity affects its demand.We can find the elasticity of demand, or the degree of Page 27/29 In Canada, the prices of most medical services are regulated by the Provinces (that is, they are subject to price ceilings). If the elasticity of demand for a service is 0.4 and the price rises, then Multiple Choice total revenue will fall. 8. 2. c) Consumers will pay a price of \$20, quantity sold will be 60 units, of which none are produced domestically. Price of a product falls by 10% and its demand rises by 30%. Here you will find a series of Free MCQ on Price Elasticity of Demand for Class 11th. b) 6/10. 7. 4. 1 1. The following TWO questions refer to the supply and demand curves illustrated below. A. Elastic. When demand is perfectly inelastic, an increase in price will result in: 10. 12) 13)The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a _____ decrease in the quantity demanded. View Answer Workspace Report Discuss in Forum. c) A 1% increase in price will result in a 2% increase in quantity supplied. For the demand function given, find the elasticity at the given price and state whether the demand is elastic, inelastic, or whether it has unit elasticity: q = D(x) = 335/(4x + 5)^2 View Answer Which areas represent the gain in government revenue as a result of this tax? Basic assumptions of law of demand include. Answer choices in this exercise appear in a different order each time the page is loaded. Which of the following correctly describes the equilibrium effects of a per unit subsidy? 4. 5. d) A deadweight loss triangle whose corners are CDE. All the following questions are from previous exams for Economics 103. elasticity of demand is A)1.66. c) 1.4 a) II only. 7. b) If there is no deadweight loss, then revenue raised by the government is exactly equal to the losses to consumers and producers. A Bretton Woods conference gave birth to two international organizations-, B Theory of Absolute Advantage in international trade is given by Adam Smith’. c) Consumer surplus, producer surplus, and social surplus all increase. Assume that the world price is equal to \$5 per unit, and that initially there are no trade restrictions. Use the diagram below, illustrates the domestic supply curve (SD) and demand curve for a good, to answer the following THREE questions. Consider diagram below, which illustrates the market for low-skilled labour. 1. 4. b) e + d. 10. The demand for the commodity should not be continuous; View answer Artha C’s Institute of management started with an aim to mix learning with experience. If a \$2 per unit subsidy is introduced, what will be the equilibrium quantity? b) 0.8. Solutions: Case Study - The Housing Market, Topic 4 Part 2: Applications of Supply and Demand, Solutions: Case Study - Automation in Fast Food, Introduction to Environmental Protection and Negative Externalities, Solutions: Case Study - The Liberal Gas Tax, Introduction to Cost and Industry Structure, 7.4 The Structure of Costs in the Long Run. a) If demand is price inelastic, then increasing price will decrease revenue. a) 0.5. Which of the following statements about the deadweight loss of taxation is TRUE? 12. If the quality demand of beef increases by 10% when the price of chicken goes up by 8%, the cross-price elasticity of demand between beef and chicken is A) perfectly inelastic. Assume no externalities, a) Consumer and producer surplus increase but social surplus decreases. b) \$6; \$11. As wise people believe “Perfect Practice make a Man Perfect”. Which of the following statements about the relationship between the price elasticity of demand and revenue is TRUE? total revenue will stay the same There is no way to determine whether total revenue will rise, fall, or remain the same. c) c+d. 5. d) All of the above could be the value of cross price elasticity of demand. d) \$8; \$3. Assume that the current price of beer is \$10 per six-pack. medicines. 4. 3. b) \$3; \$6. b) Spending on socks may either increase or decrease as a result of the tax. If a tariff of \$10 per unit is introduced in the market, then the government will raise ____ in tariff revenue. Suppose you are told that the own-price elasticity of supply equal 0.5. Demand is unit elastic at a price of \$30, and inelastic at all prices less than \$30. b) The deadweight loss from the price ceiling will be greater than the deadweight loss from the price floor. If supply is perfectly inelastic, then producers bear none of the burden of a tax, no matter what the value of own-price elasticity of demand. a) A deadweight loss triangle whose corners are ABC. 26. A On a linear demand curve, all the five forms of elasticity can be depicted’. a) Price ceilings make sellers worse off. b) I and II only. a) 1.6. (a) The desire to have a commodity or service is called: (i) Want, (ii) Utility. More Price Elasticity Quizzes. d) All of the above could be the value of cross price elasticity of demand. Which areas represent the loss to consumer AND producer surplus as a result of this tax? Use the diagram below – which illustrates the domestic supply and demand curves for a good – to answer the following TWO questions. d) None of the above. b) If demand is unit elastic. If the elasticity of demand for a commodity is estimated to be 1.5, then a decrease in price from \$2.10 to \$1.90 would be expected to increase daily sales by: ... Use the graph below to answer question number 13 13. c) 30 units. 15. The Heckscher-Ohlin approach to international trade provides important insights, in, B Effect of trade on production and consumption, C Effect of trade on the incomes of production factors. Irrespective of price, Sofia always spends Rs. c) Neither a) nor b) are true. Overall you need 80% to achieve a … III. d) 55 units. Questions and Answers 1. Assume that the world price is equal to \$10 per unit, and initially there are no trade restrictions. ADVERTISEMENTS: (iii) … The commodity should not confer any distinction. B Imposition of restrictions in international trade, C Removal of all restrictions from international trade, D The idea of self sufficiency and no international trade by a country, Answer: The idea of self sufficiency and no international trade by a country. d) The supply of that good will be relatively elastic, compared to goods for which there are many close substitutes. This quiz tests your knowledge on various aspects of price elasticity of demand - feedback is provided on your score for each question. c) Producers are worse off as a result of the tax. If the government introduces a minimum wage law set at \$9 per hour, then, in the new equilibrium, which of the following statements is TRUE? B Elasticity of demand is 1. (Assume the price ceiling is set below the unregulated equilibrium price.). (Assume a downward-sloping demand curve for socks.). Free Online MCQ Questions of Class -11 Microeconomics Chapter 6 – Price Elasticity of Demand with Answers. a) 0.2. c) Neither a) nor b) are true. 38. a) Consumers are worse off as a result of the tax. d) a + b + d + h + g + f. 5. The cost of one thing in terms of the alternative given up is called: 17. 5. d) Neither a) nor b is true). Use the mid-point formula in your calculation. b) 40 units. 1. Answer: If two demand curves are linear and intersecting each other then coefficient of elasticity would be same on different demand curves at the point of intersection. c) Both a) and b). The demand for _____ is highly inelastic. d) 40 units. 3. Which of the following statements about price ceilings is TRUE? 1. Which of the following statements about minimum wages is true? Normally a demand curve will have the shape: 2. b) \$9; \$3. If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price elasticity of demand? 8 .Cost push inflation occurs because of: 9. If the supply curve is perfectly elastic, consumers will bear none of the burden of the tax. C) elastic. 2. d) The supply of that good will be relatively elastic, compared to goods for which there are few close substitutes. d) Consumer surplus, producer surplus, and social surplus all decrease. c) 60 units. If quantity demanded is completely unresponsive to changes in price, demand is: 29. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the … Which among below is NOT a correct statement? b) P = \$4, Q = 8. a) If demand is perfectly elastic. b) e. Use the demand curve diagram below to answer the following TWO questions. Answer: Elasticity of demand is 1. b) 7.0 c) 2.0. d) 1.75 . Assume that the world price is equal to \$20 per unit, and initially there are no trade restrictions in place. b) A 1% increase in price will result in a 5% increase in quantity supplied. III. c) The amount by which quantity supplied will change as price changes. b) Minimum wage laws make employers worse off. b) j + g. C The good is a substitute. Two goods are consumption complements. c) Consumer surplus, producer surplus, and social surplus all increase. Assume a downward-sloping demand curve diagram below to answer the following correctly describes the equilibrium quantity completely unresponsive to in! 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