Pierce College » Economics » Economics 1 - Principles of Economics » Summer 2020

Economics 1 - Principles of Economics » Summer 2020 » Elasticity Quiz

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Question #1

_______ is the change in what is on the horizontal axis (quantity) divided by the change in what is on the vertical axis (price).

A. Supply

B. Revenue

C. Demand

D. Elasticity

Question #2

A perfectly elastic supply curve is:

A. downward sloping to the left.

B. upward sloping to the right.

C. horizontal.

D. vertical.

Question #3

If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to:

A. rise and the equilibrium quantity to stay the same.

B. rise and the equilibrium quantity to fall.

C. stay the same and the equilibrium quantity to fall.

D. fall and the equilibrium quantity to fall.

Question #4

The evidence on the supply curve of financial capital is controversial, but at least in the short run, the elasticity of savings with respect to the interest rate appears to be _______ .

A. negative

B. perfectly elastic

C. inelastic

D. elastic

Question #5

A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. It appears that:

A. elasticity of demand for potato chips is 3.

B. elasticity of demand for soda 3.

C. elasticity of demand for potato chips is 3.

D. cross-price elasticity of demand for soda is -3.

Question #6

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

A. rise and the equilibrium quantity to fall.

B. rise and the equilibrium quantity to stay the same.

C. fall and the equilibrium quantity to stay the same.

D. fall and the equilibrium quantity to fall.

Question #7

Suppose that Bobo purchases 1 pizza per month when the price is $19 and 3 pizzas per month when the price is $15. What is the price elasticity of Bobo's demand curve?

A. 0.235

B. 4.25

C. 6.33

D. 2.00

Question #8

Demand is said to be _______ when the quantity demanded is not very responsive to changes in price.

A. elastic

B. unit elastic

C. inelastic

D. independent

Question #9

Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a 15 percent decrease in the number of haircuts purchased. What is the elasticity of demand facing Billy Bob's Barber Shop?

A. 0.10

B. 3.0

C. 0.15

D. 0.05

Question #10

If the demand curve is perfectly elastic, then an increase in supply will:

A. decrease the price but result in no change in the quantity exchanged.

B. increase both the price and the quantity exchanged.

C. increase the price but result in no change in the quantity exchanged.

D. increase the quantity exchanged but result in no change in the price.

Question #11

When economists are sketching examples of demand and supply, it is common to sketch a demand or supply curve that is close to vertical, and then to refer to that curve as _______ .

A. income elasticity

B. unitary elasticity

C. inelastic

D. elastic

Question #12

Price elasticity of demand is defined as:

A. the slope of the demand curve.

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

C. the slope of the demand curve divided by the price.

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

Question #13

When economists are sketching examples of a demand or supply curve that is close to horizontal, they refer to that demand or supply curve as _______ .

A. inelastic

B. having zero elasticity

C. price inelasticity

D. elastic

Question #14

Taxes on goods with _______ demand curves will tend to raise more tax revenue for the government than taxes on goods with _______ demand curves.

A. inelastic; elastic

B. elastic; unit elastic

C. elastic; inelastic

D. unit elastic; inelastic

Question #15

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume:

A. macaroni is an inferior good and price elasticity of supply is equal to zero.

B. macaroni is an inferior good and price elasticity of demand is less than 1.

C. macaroni is an inferior good and price elasticity of supply is infinite.

D. macaroni is a normal good and price elasticity of demand is greater than 1.

Question #16

A demand or supply curve with _______ would be horizontal in appearance.

A. unitary elasticity

B. infinite cost elasticity

C. zero elasticity

D. infinite elasticity

Question #17

A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears that:

A. cross-price elasticity of demand for iced tea is -0.5.

B. cross-price elasticity of demand for iced tea is 2.

C. elasticity of demand for soda 0.5 and is inelastic.

D. elasticity of demand for iced tea is 2 and is elastic.

Question #18

Demand is said to be _______ when the quantity demanded changes at the same proportion as the price.

A. inelastic

B. unit elastic

C. elastic

D. independent

Question #19

Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi's demand curve?

A. 0.1

B. 0.8

C. 1.0

D. 10.0

Question #20

If the supply curve for a product is vertical, then the elasticity of supply is:

A. equal to infinity.

B. equal to zero.

C. greater than 1 but less than infinity.

D. equal to 1.

Question #21

Supply is said to be _______ when the quantity supplied is very responsive to changes in price.

A. elastic

B. independent

C. unit elastic

D. inelastic

Question #22

The longer the time period considered, the more the elasticity of supply tends to:

A. remain constant

B. converge to zero

C. increase

D. decrease

Question #23

The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal:

A. 20 units.

B. 0 units.

C. 10 units.

D. 5 units.

Question #24

The price elasticity of demand measures the:

A. responsiveness of quantity demanded to a change in price.

B. responsiveness of quantity demanded to a change in income.

C. responsiveness of price to a change in quantity demanded.

D. responsiveness of quantity demanded to a change in quantity supplied.

Question #25

When demand is inelastic:

A. consumers are not very responsive to changes in price.

B. price elasticity of demand is greater than 1.

C. demand curves appear to be fairly flat.

D. the percentage change in quantity demanded resulting from a price change is greater than the percentage change in price.

Question #26

If the supply curve for a product is horizontal, then the elasticity of supply is:

A. equal to 1.

B. equal to infinity.

C. greater than 1 but less than infinity.

D. equal to zero.

Question #27

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _______ .

A. the slope in the supply curve

B. quantity supplied

C. price

D. the slope of the demand curve

Question #28

If cola and iced tea are good substitutes for consumers, then it is likely that:

A. their cross price elasticities are greater than zero.

B. their price elasticities of supply are less than one.

C. their income elasticities are less than zero.

D. their price elasticities of demand are less than one.

Question #29

Demand is said to be _______ when the quantity demanded is very responsive to changes in price.

A. elastic

B. independent

C. unit elastic

D. inelastic

Question #30

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

A. decreasing the price of game tickets because demand is elastic.

B. increasing the price of game tickets because demand is inelastic.

C. not changing the price of game tickets because demand is unit elastic.

D. increasing the price of game tickets because demand is elastic.

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