Quiz Questions on Price Elasticity of Demand
In-class exercises – Tute 3
- Elasticities & Welfare
Price elasticity of demand:
How to calculate
Sign and sizes – illustration by demand curve
E & TR
Determinants/factors
MCQs:
1. Question 4 (Quiz - topic 3):
If Sam, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam’s pizzas in this range is:
a. price inelastic.
b. price elastic.
c. unit elastic.
d. cross elastic.
e. income inelastic.
2. Question 6 (Quiz - topic 3):
If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:
a. elastic.
b. inelastic.
c. perfectly inelastic.
d. perfectly elastic.
3. Question 15 (Quiz - topic 3):
If the price elasticity of demand for beans is estimated to be -0.4, then a 20% increase in the price will ……….. the quantity demanded by …………….
a. Decrease, 14%
b. Increase, 16%
c. Decrease, 8%
d. Increase, 8%
4. Question 18 (Quiz - topic 3):
John spends exactly the same dollar amount of candy bars each week regardless of their price. His demand curve for candy bars is
a. Upward sloping
b. Downward sloping
c. Perfectly inelastic
d. Perfectly elastic
Illustrate by a diagram!
5. Question 2 (Quiz - topic 3):
If a decrease in the price of movie tickets increases the total revenue of movie theatres, this is evidence that demand is:
a. price elastic.
b. price inelastic.
c. unit elastic with respect to price.
d. perfectly inelastic.
Illustrate by a diagram!
6. Question 17 (Quiz - topic 3):
If a firm raises the price of its product, its total revenue will
a. Always increase
b. Increase only if demand is price elastic
c. Increase only if demand is price inelastic
d. Remain the same Illustrate by a diagram!
7. Question 14 (Quiz - topic 3):
When consumers only have a limited time to respond to price changes, demand becomes:
a. Less price elastic
b. More
- Elasticities & Welfare
Price elasticity of demand:
How to calculate
Sign and sizes – illustration by demand curve
E & TR
Determinants/factors
MCQs:
1. Question 4 (Quiz - topic 3):
If Sam, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam’s pizzas in this range is:
a. price inelastic.
b. price elastic.
c. unit elastic.
d. cross elastic.
e. income inelastic.
2. Question 6 (Quiz - topic 3):
If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:
a. elastic.
b. inelastic.
c. perfectly inelastic.
d. perfectly elastic.
3. Question 15 (Quiz - topic 3):
If the price elasticity of demand for beans is estimated to be -0.4, then a 20% increase in the price will ……….. the quantity demanded by …………….
a. Decrease, 14%
b. Increase, 16%
c. Decrease, 8%
d. Increase, 8%
4. Question 18 (Quiz - topic 3):
John spends exactly the same dollar amount of candy bars each week regardless of their price. His demand curve for candy bars is
a. Upward sloping
b. Downward sloping
c. Perfectly inelastic
d. Perfectly elastic
Illustrate by a diagram!
5. Question 2 (Quiz - topic 3):
If a decrease in the price of movie tickets increases the total revenue of movie theatres, this is evidence that demand is:
a. price elastic.
b. price inelastic.
c. unit elastic with respect to price.
d. perfectly inelastic.
Illustrate by a diagram!
6. Question 17 (Quiz - topic 3):
If a firm raises the price of its product, its total revenue will
a. Always increase
b. Increase only if demand is price elastic
c. Increase only if demand is price inelastic
d. Remain the same Illustrate by a diagram!
7. Question 14 (Quiz - topic 3):
When consumers only have a limited time to respond to price changes, demand becomes:
a. Less price elastic
b. More