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Multiple Choice Quiz
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1
The price elasticity of demand measures:
A)the responsiveness of consumers to changes in supply.
B)the percentage change in quantity demanded as a result of a one-percent change in price.
C)the change in quantity demanded as a result of a one-dollar change in price.
D)how far consumers can stretch their incomes.
2
Arc elasticity of demand measures consumer responsiveness:
A)between two points on a demand curve.
B)at a single point on the demand curve.
C)when the demand curve is non-linear.
D)when elasticity is negative.
3
When demand curves are vertical:
A)elasticity is infinite.
B)elasticity is equal to one.
C)elasticity is equal to zero.
D)elasticity is positive.
4
Point elasticity of demand measures consumer responsiveness:
A)between two points on a demand curve.
B)at a single point on the demand curve.
C)when the demand curve is non-linear.
D)when elasticity is negative.
5
The elasticity of a demand curve where it intersects the horizontal axis:
A)depends on the slope of the demand curve.
B)depends on the point of intersection.
C)depends on the type of good or service involved.
D)is always equal to zero.
6
Demand is elastic when:
A)consumers do not respond to price changes.
B)the demand curve is fairly steep.
C)the elasticity value is greater than one.
D)the elasticity value is less than one.
7
Which of the following goods is likely to have the most elastic demand?
A)Molson Canadian beer.
B)bottled domestic beer.
C)domestic draught beer.
D)beer in general.
8
An increase in price will:
A)reduce expenditures if demand is elastic.
B)reduce expenditures if demand is inelastic.
C)reduce expenditures if supply is elastic.
D)reduce expenditures if supply is inelastic.
9
The elasticity of demand is usually:
A)high for necessities.
B)low when there are plenty of substitutes.
C)low in the short run.
D)high in the short run.
10
Looking at the price of movie tickets and the demand for video rentals we would expect to find that:
A)the price elasticity is less than 1.
B)the price elasticity is greater than 1.
C)the cross-price elasticity is less than zero.
D)the cross-price elasticity is greater than zero.
11
An inferior good is a good that has:
A)a negative income elasticity.
B)a negative cross-price elasticity.
C)a positive income elasticity.
D)a positive cross-price elasticity.
12
A good is a classified as a necessity when:
A)cross-price elasticity is positive and less than one.
B)price elasticity is negative and greater than one.
C)income elasticity is positive and less than one.
D)income elasticity is negative and less than one.
13
Which of the following would be used to estimate demand in a growing economy?
A)cross-price elasticity.
B)income elasticity.
C)price elasticity.
D)none of the above.
14
A shift in demand will not cause an increase in output when:
A)price elasticity of supply is zero.
B)income elasticity of demand is zero.
C)price elasticity of demand is zero.
D)price elasticity of supply is infinite.
15
The incidence of a tax falls more on the consumer when:
A)demand is elastic and supply is inelastic.
B)demand is elastic and supply is elastic.
C)demand is inelastic and supply is elastic.
D)demand is inelastic and supply is inelastic.





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