Which one of the following situations would lead to an increase in equilibrium price?

Demand is perfectly inelastic and labour costs rise

A small firm is able to buy any amount of a raw material on world markets at the same price...

elastic demand curve for the raw material.

The government was recently advised that a 40% increase in the price of beer would...

demand for beer is price inelastic for both rich and poor.

Which one of the following measures of elasticity indicates that two goods are substitutes?

A positive cross elasticity of demand

The income elasticity of demand for a good is −3. Which one of the following is correct?

A 20% increase in income leads to a 60% fall in demand

The diagram below shows the market demand and supply curves for organic apples...

the PES of organic apples is +2.

The essential feature of an inferior good is that its

income elasticity of demand is negative

An industry’s supply curve is more likelyto be price elastic in the short term if

its firms are operating below their fullcapacity.

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AS Economics - Demand, Supply & Elasticity

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Questions 10

Answers

1
Which one of the following situations would lead to an increase in equilibrium price?
Demand is perfectly inelastic and labour costs fall
Supply is perfectly elastic & price of a substitute falls
Demand is perfectly inelastic and labour costs rise
Demand is perfectly elastic and labour costs rise
2
A small firm is able to buy any amount of a raw material on world markets at the same price...
elastic supply curve for the raw material.
inelastic supply curve for the raw material.
elastic demand curve for the raw material.
inelastic demand curve for the raw material.
3
An indirect tax on the production of a good will have no effect on price if demand is
of unitary elasticity.
inversely related to price.
perfectly elastic.
perfectly inelastic.
4
The government was recently advised that a 40% increase in the price of beer would...
the rich consume less beer than the poor.
for the rich, beer is an inferior good.
demand for beer is price inelastic for both rich and poor.
the poor have price elastic demand; the rich inelastic
5
Which one of the following measures of elasticity indicates that two goods are substitutes?
A positive cross elasticity of demand
A negative income elasticity of demand
A positive price elasticity of demand
A negative price elasticity of demand
6
The diagram below illustrates the demandand supply curves for mobile phones
- 2.5
- 0.4
- 0.8
- 2.0
7
The income elasticity of demand for a good is −3. Which one of the following is correct?
A 10% increase in price leads to a 30% fall in demand
Demand for the good is income inelastic.
A 20% increase in income leads to a 60% fall in demand
The good is a normal good
8
The diagram below shows the market demand and supply curves for organic apples...
the PES of organic apples is +2.
there will be excess supply of organic apples.
the PED for organic apples is positive.
organic apples are a luxury good.
9
The essential feature of an inferior good is that its
price elasticity of demand is negative.
income elasticity of demand is negative
income elasticity of demand is positive.
price elasticity of demand is positive.
10
An industry’s supply curve is more likelyto be price elastic in the short term if
its firms are operating below their fullcapacity.
its firms hold relatively low levels ofstock.
there are many substitutes for its output.
the industry uses scarce factor inputs.

AS Economics - Demand, Supply & Elasticity Flashcards | StudBud

AS Economics - Demand, Supply & Elasticity

10 termsStudBud Administration1,061 plays

AS Economics - Demand, Supply & Elasticity

Flashcards10 cardsFPractice quizPHost liveL

Questions 10

Answers

1
Which one of the following situations would lead to an increase in equilibrium price?
Demand is perfectly inelastic and labour costs fall
Supply is perfectly elastic & price of a substitute falls
Demand is perfectly inelastic and labour costs rise
Demand is perfectly elastic and labour costs rise
2
A small firm is able to buy any amount of a raw material on world markets at the same price...
elastic supply curve for the raw material.
inelastic supply curve for the raw material.
elastic demand curve for the raw material.
inelastic demand curve for the raw material.
3
An indirect tax on the production of a good will have no effect on price if demand is
of unitary elasticity.
inversely related to price.
perfectly elastic.
perfectly inelastic.
4
The government was recently advised that a 40% increase in the price of beer would...
the rich consume less beer than the poor.
for the rich, beer is an inferior good.
demand for beer is price inelastic for both rich and poor.
the poor have price elastic demand; the rich inelastic
5
Which one of the following measures of elasticity indicates that two goods are substitutes?
A positive cross elasticity of demand
A negative income elasticity of demand
A positive price elasticity of demand
A negative price elasticity of demand
6
The diagram below illustrates the demandand supply curves for mobile phones
- 2.5
- 0.4
- 0.8
- 2.0
7
The income elasticity of demand for a good is −3. Which one of the following is correct?
A 10% increase in price leads to a 30% fall in demand
Demand for the good is income inelastic.
A 20% increase in income leads to a 60% fall in demand
The good is a normal good
8
The diagram below shows the market demand and supply curves for organic apples...
the PES of organic apples is +2.
there will be excess supply of organic apples.
the PED for organic apples is positive.
organic apples are a luxury good.
9
The essential feature of an inferior good is that its
price elasticity of demand is negative.
income elasticity of demand is negative
income elasticity of demand is positive.
price elasticity of demand is positive.
10
An industry’s supply curve is more likelyto be price elastic in the short term if
its firms are operating below their fullcapacity.
its firms hold relatively low levels ofstock.
there are many substitutes for its output.
the industry uses scarce factor inputs.