A good has a YED of +5 and a PES of +4. If real incomes rose...

Demand would rise and supply would respond easily

Chinese car brand Chery estimates YED for its range at -0.6 Demand is D1 and incomes rise...

The new demand curve shifts to D2

This demand curve has what characteristic?

It is perfectly price inelastic in demand

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Elasticities

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MC questions based on the new AQA A-level specification.

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Questions 15

Answers

1
A good has a YED of +5 and a PES of +4. If real incomes rose...
Demand would rise and supply would not respond easily
Demand would rise but supply would fall
Demand would fall and so would supply
Demand would rise and supply would respond easily
2
Price of X rises by 10%. Demand falls from 250 per month to 200.
PED is 2
PED is -2
PED is -0.5
PED = 0.5
3
As UK real disposable income rises by 5%, spending on bus travel rises by 3%. Bus travel is...
Income elastic in demand
An inferior good
A normal good
A luxury good
4
Chinese car brand Chery estimates YED for its range at -0.6 Demand is D₁ and incomes rise...
The cars are normal goods
The cars are luxury goods
The new demand curve shifts to D3
The new demand curve shifts to D2
5
What sort of price elasticity is represented by this image?
Unitary elasticity of demand
Income inelastic demand
Price elastic demand
Price inelastic demand
6
Which of the following PED values represents a typical good with price elastic demand?
-1.0
1.8
-1.6
-0.7
7
This demand curve has what characteristic?
It is perfectly price inelastic in demand
It is perfectly price elastic in demand
It is relatively price elastic in demand
It is relatively price inelastic in demand
8
What is the value of price elasticity of demand in this case?
+4
-0.25
-4
+0.25
9
Price of X rises by 20%. Demand for Y falls from 60 to 30.
It is not possible to say what will happen to revenue
Total revenue will fall
Total revenue will remain unchanged
Total revenue will rise
10
Price of X rises by 10%. Demand falls from 250 per month to 200.
Revenue falls
Revenue is unchanged
Effect on revenue is unknown
Revenue rises
11
The following demand curve is a 'rectangular hyperbola'. Along its length, PED...
Is always unitary
Varies
Is perfectly elastic
Is perfectly inelastic
12
The price of Coke rises by 25%; the demand for Pepsi rises by 5%. Which statement is true?
The cross-price elasticity of demand is -0.2
The cross-price elasticity of demand is -5
The goods are strong substitutes
The goods are weak substitutes
13
As UK real disposable income rises by 10%, spending on fireworks rises by 25%. Fireworks are...
A luxury good
Income inelastic in demand
A necessity
An inferior good
14
The price elasticity of supply in the following situation is..?
Price elastic
Price inelastic
15
All of the following will influence the price elasticity of supply for a new Samsung TV, except
Demand for Samsung TVs
The availability of skilled labour
The time period
Flexibility of components' suppliers

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