Elasticity For Economics(Economics ) Questions and Answers
Question 1. If the income elasticity of demand for a good is negative it must be ?
an elastic good
an inferior good
a normal good
a luxury good
Explanation:-
Answer: Option B. -> an inferior good NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. If a supply curve for a good is price elastic then ?
the quantity supplied is sensitive to changes in the price of that good
That quantity demanded is insensitive to changes in the price of that good
the quantity demanded is sensitive to changes in the price of that good
the quantity supplied is incentive to changes in the price of that good
None of these
Explanation:-
Answer: Option A. -> the quantity supplied is sensitive to changes in the price of that good NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to ?
increase total revenue to farmers as a whole because the demand for food is elastic
increase total revenue to farmers as whole because the demand for food is inelastic
reduce total revenue to farmers as a whole because the demand for food is elastic
reduce total revenue to farmers as a whole because the demand for food is inelastic
Explanation:-
Answer: Option D. -> reduce total revenue to farmers as a whole because the demand for food is inelastic NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. A decrease in supply (shift to the left) will increase total revenue in that market if ?
demand is price inelastic
supply is price elastic
supply is price inelastic
demand is price elastic
Explanation:-
Answer: Option A. -> demand is price inelastic NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. If there is excess capacity in a production facility it is likely that the firm’s supply curve is ?
price inelastic
none of these
unit price elastic
price elastic
Explanation:-
Answer: Option D. -> price elastic NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. If consumers think that there are very few substitutes for a good, then ?
Supply would tend to be price elastic
none of these answers
demand would tend to be price inelastic
demand would tend to be price elastic
Explanation:-
Answer: Option C. -> demand would tend to be price inelastic NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. The demand for which of the following is likely to be the most price inelastic ?
transportation
taxi rides
bus tickets
airline tickets
Explanation:-
Answer: Option A. -> transportation NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. In general a flatter demand curve is more likely to be ?
price elastic
none of these answers
unit price elastic
price inelastic
Explanation:-
Answer: Option D. -> price inelastic NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. If demand is linear (a straight line) then price elasticity of demand is ?
elastic in the upper portion and inelastic in the lower portion
inelastic in the upper portion and elastic in the lower portion
inelastic throughout
constant along the demand curve
Explanation:-
Answer: Option A. -> elastic in the upper portion and inelastic in the lower portion NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. The price elasticity of demand is defined as ?
the percentage change in the quantity demanded divided by the percentage change in income.
the percentage change in income divided by the percentage change in the quantity demanded
the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good
none of these answers
Explanation:-
Answer: Option C. -> the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
