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Issues in Economics Today
Issues in Economics Today
Robert Guell, Indiana State University
Elasticity, Consumer Surplus, and Producer Surplus

Multiple Choice Quiz



1

The elasticity of demand refers to the degree to which _____ affects quantity demanded.
A) price
B) the number of potential buyers
C) supply
D) equilibrium
2

The mathematical formula for the elasticity of demand
A) is the same as the slope of the demand curve.
B) includes only the price-quantity combination.
C) includes neither the slope nor the price quantity combination.
D) includes both the slope and the price quantity combination.
3

A change in supply will dramatically affect quantity much more than price when demand is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly inelastic.
4

A change in supply will dramatically affect price much more than quantity when demand is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly elastic.
5

A linear demand curve
A) is everywhere unit elastic.
B) is everywhere elastic.
C) is everywhere inelastic.
D) has elastic and inelastic points depending on price.
6

If the percentage change in price is greater than the percentage change in quantity then demand is
A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly elastic.
7

If the percentage change in price is less than the percentage change in quantity then demand is
A) elastic.
B) Inelastic.
C) unit elastic.
D) perfectly inelastic.
8

The area that represents the value to the consumer
A)
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B)
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C)
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D)
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9

The area that represents the money consumers pay producers is
A)
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B)
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C)
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D)
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10

The area that represents the consumer surplus is
A)
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B)
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C)
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D)
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11

The area that represents the producer surplus is
A)
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B)
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C)
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D)
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12

The area that represents the net value to society is
A)
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B)
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C)
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D)
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=gif:: ::/sites/dl/free/0072345772/33369/guell_mcquiz_3_7.gif','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (1.0K)</a>
13

The area that represents the variable cost to producers is
A)
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B)
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C)
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D)
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=gif:: ::/sites/dl/free/0072345772/33369/guell_mcquiz_3_7.gif','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (1.0K)</a>
14

If there is deadweight loss
A)the net value to society is smaller than it could be.
B)the consumer surplus is smaller than it could be.
C)the producer surplus is smaller than it could be.
D)the producer surplus is unfairly high.
15

The net value to society is measured as
A)the consumer surplus.
B)the producer surplus.
C)the consumer surplus minus the producer surplus.
D)the consumer surplus plus the producer surplus.




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