Multiple Choice Question & Answer

YB WEB DESK. Dated: 4/15/2021 11:38:10 AM

Multiple Choice Questions on Elasticity of Demand
1-Elasticity is the measure of ___ .
(A) responsiveness
(B) change
(C) price
(D) need
2-A good or service is considered to be elastic if a slight change in price leads to ___
change in the quantity demanded or supplied.
(A) only modest
(B) no
(C) a sharp
(D) any of the above
3-An inelastic good or service is one in which changes in price witness ___ changes in
the quantity demanded or supplied
(A) only modest
(B) no
(C) a sharp
(D) any of the above
4-The law of demand tells us that consumers will respond to a price decline by buying
___ of a product.
(A) less
(B) more
(C) substitute
(D) none of the above
5-The total revenues of the firm will equal the
(A) price changed x quantity sold
(B) price changed + quantity sold
(C) price changed / quantity sold
(D) quantity sold / price changed
6-All such demand curves where quantity demanded is totally unresponsive to changes
in price are called
(A) perfectly elastic demand curve
(B) perfectly inelastic demand curve
(C) Unitary elastic demand curve
(D) none of the above
7- Such horizontal demand curves, where quantity demanded is infinitely responsive to
price changes, are called
(A) perfectly elastic demand curve
(B) perfectly inelastic demand curve
(C) Unitary elastic demand curve
(D) none of the above
8-The ___ have a property that when price decreases total revenue increases, and viceversa.
(A) perfectly elastic demand curve
(B) perfectly inelastic demand curve
(C) Unitary elastic demand curve
(D) none of the above
9-The elasticity coefficient for perfectly elastic demand curve is
(A) zero
(B) one
(C) infinity
(D) none of the above
10-Demand curve is said to be ___ and has the property that when price increases or
decreases, the total revenue remains constant.
(A) perfectly elastic
(B) perfectly inelastic
(C) unitary elastic
(D) none of the above
11-The elasticity coefficient for unitary demand curves is equal to
(A) zero
(B) one
(C) infinity
(D) none of the above
12-Demand curves which have an elasticity coefficient __ are called relatively inelastic
or simply inelastic.
(A) 0
(B) 1
(C) between 0 and 1
(D) infinity
13-The elasticity coefficient for a relatively elastic or simply elastic demand curve, is
(A) 0
(B) 1
(C) between 0 and 1
(D) between 1 and infinity
14-In the real world, ___ per cent of the demand curves are either relatively elastic or relatively
inelastic.
(A) 69.99
(B) 79.99
(C) 89.99
(D) 99.99
15-Elasticity can be measured by
(A) Geometrical Method
(B) Arithmetical Method
(C) Both (A) and (B)
(D) None of the above
16-Luxury goods tend to have an
(A) elastic demand
(B) inelastic demand
(C) unitary demand
(D) none of the above
17- Necessity goods tend to have an
(A) elastic demand
(B) inelastic demand
(C) unitary demand
(D) none of the above
18- The cross elasticity of demand is a numerical measure of the degree to which quantity
demanded of a good responds to changes in the ___, the other determinants of
demand being kept constant.
(A) prices of other commodities
(B) income
(C) price
(D) none of the above
19- An understanding of elasticity is fundamental in understanding the ___ in a market.
(A) response of supply
(B) demand
(C) both (A) and (B)
(D) none of the above
20- The arc elasticity is a measure of
(A) minimum elasticity
(B) maximum elasticity
(C) average elasticity
(D) all of the above
AnswErs:
1-(A), 2-(c), 3-(A), 4-(B), 5-(A), 6-(B), 7-(A), 8-(A), 9-(c), 10-(c), 11-(B), 12-(c), 13-(d),
14-(d), 15-(c), 16-(A), 17-(B), 18-(A), 19-(c), 20-(c)

 

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