Economics study desk with supply and demand curves, scales and an economic city model

Focused topic practice

elasticity MCQs

Practise focused elasticity questions with marked answers for exam preparation and subject revision.

elasticity Mcqs
1. in general a flatter demand curve is more likely to be ?
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A. price elastic

B. unit price elastic

C. none of these answers

D. price inelastic

2. If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is ?
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A. income inelastic

B. price inelastic

C. price elastic

D. unit price elastic

3. If the income elasticity of demand for a good is negative it must be ?
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A. a normal good

B. an inferior good

C. a luxury good

D. an elastic good

4. in general a flatter demand curve is more likely to be ?
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A. price inelastic

B. price elastic

C. unit price elastic

D. none of these answers

5. If a supply curve for a good is price elastic then ?
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A. the quantity demanded is sensitive to changes in the price of that good

B. None of these

C. the quantity supplied is incentive to changes in the price of that good

D. the quantity supplied is sensitive to changes in the price of that good

E. That quantity demanded is insensitive to changes in the price of that good

6. Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to ?
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A. reduce total revenue to farmers as a whole because the demand for food is inelastic

B. increase total revenue to farmers as a whole because the demand for food is elastic

C. increase total revenue to farmers as whole because the demand for food is inelastic

D. reduce total revenue to farmers as a whole because the demand for food is elastic

7. Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raises its price Rs40 per month the number of subscribers will fall to 20000 Using the midpoint method for calculating the elasticity what is the price elasticity of demand for cable TV in Small Town ?
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A. 0.66

B. 1.4

C. 0.75

D. 2

8. If consumers think that there are very few substitutes for a good, then ?
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A. demand would tend to be price elastic

B. demand would tend to be price inelastic

C. Supply would tend to be price elastic

D. none of these answers

9. If a fisher must sell all of his daily catch before it spoils for whatever price he is offered once the fish are caught the fishermans price elasticity of supply for fresh fish is ?
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A. infinite

B. unable to be determined form this information

C. one

D. zero
10. A decrease in supply (shift to the left) will increase total revenue in that market if ?
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A. supply is price elastic

B. supply is price inelastic

C. demand is price elastic

D. demand is price inelastic
11. If there is excess capacity in a production facility it is likely that the firms supply curve is ?
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A. none of these

B. price inelastic

C. unit price elastic

D. price elastic
12. Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raise its price to Rs 40 per month the number of subscribers will fall to 20000 At which of the following price does small Town Cablevision earn the greatest total revenue ?
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A. Rs 30 per month

B. Either Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0

C. Rs 0 per month

D. Rs 40 per month

13. If an increase in the price of a good has no impact on the total revenue in that market demand must be ?
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A. all of these answers

B. price elastic

C. unit price elastic

D. price inelastic

14. The price elasticity of demand is defined as ?
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A. none of these answers

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

C. the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

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

15. If demand is linear (a straight line) then price elasticity of demand is ?
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A. inelastic in the upper portion and elastic in the lower portion

B. elastic in the upper portion and inelastic in the lower portion

C. inelastic throughout

D. constant along the demand curve

16. If consumers always spend 15 percent of their income on food. then the income elasticity of demand for food is ?
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A. 0.15

B. none of these

C. 1.00

D. 1.15

E. 1.5

17. If supply is price inelastic the value of the price elasticity of supply must be ?
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A. greater than 1

B. less than 1

C. infinite

D. none of these

E. Zero

18. The demand for which of the following is likely to be the most price inelastic ?
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A. transportation

B. airline tickets

C. taxi rides

D. bus tickets

19. Which of the following would cause a demand curve for a good to be price inelastic ?
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A. There are a great number of substitutes for the good

B. The good is luxury

C. The good is an inferior good

D. The good is a necessity
20. If the cross-price elasticity between two goods is negative the two goods are likely to be ?
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A. luxuries

B. substitutes

C. necessities

D. complements