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Elasticity
Elasticity
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1
You earn £30,000 and a sports magazine costs £40 a year.Your demand for the magazine is
Perfectly elastic
Inelastic
Perfectly inelastic
Elastic
2
If consumers think that there are very few substitutes for a good, then
supply would tend to be price elastic.
demand would tend to be price elastic.
demand would tend to be price inelastic.
none of these answers.
3
What factors explain why the price elasticity of demand for petrol is relatively inelastic
The supply is relatively inelastic
It is a broad category
Number and closeness of substitutes
It is a horizontal demand curve
4
The PED for petrol is -0.2 in the short run. If the P of petrol rises 28%, what effect on Qd
-2%
-5.6%
5.6%
28%
5
Income elasticity of demand is
Negative when it is an inferior good
Between 0 and 1 when it is a necessity
Always negative
Always positive
6
Would you expect the cross-price elasticity between bread and butter to be:
Negative
Positive
Zero
Inferior
7
If demand drops to zero at the slightest increase in price, demand is
Unitary elastic
Perfectly inelastic
Relatively inelastic
Perfectly elastic
8
An increase in supply caused no change in equilibrium quantity bought and sold. Thus demand is
Inelastic
Unitarily elastic
Perfectly inelastic
Elastic
9
When people have more time to respond to price changes, demand becomes
Less elastic
Unitarily elastic
Neither more nor less elastic
More elastic
10
What factors might explain why the PED for chicken is relatively elastic in the long term?
Few substitutes
It is a broad category
It is a normal good
The longer time period
11
If your income increased by 5% and the Q you demanded decreased by 4%, income elasticity is
0.8
-0.8
1.25
-1.25
12
Which of these features does an advertiser try to achieve?
Shift the demand curve to the rightand less price elastic
Make the elasticity of demand positive
Increase the elasticity of supply
Shift the product’s demand curve
13
Cross price elasticity of demand is
Positive for substitute goods
Positive for complementary goods
Always unitary
Always greater than 1
14
In the short run elasticity of supply for a product is less elastic than in the
Single week
Immediate period
Long run
None of the above
15
The PED for petrol is -0.7 in the short run. If the P of petrol rises 28%, what effect on Qd
19.6%
-19.6%
-0.35%
-0.7%
