ELASTICITY MCQS
1 The demand for a commodity has unitary price elasticity.
Which diagram shows the relationship between total expenditure on the
commodity and its price?
2 The diagram shows four different straight line supply curves.
3 The demand for a commodity has unitary price elasticity.
Which diagram shows the relationship between total expenditure on the
commodity and its price?
4 The diagram shows four different straight line supply curves.
NAME:
5 The market for tractors is supplied by two firms, X and Y, each
initially having 50 % of the market.
A 10 % increase in the price of tractors leads to an increase in output
from firm X of 10 % and from firm Y of 20 %.
What is the price elasticity of supply of tractors in this market?
A1 B 1.5 C2 D3
6 Good X is a substitute for Good Y and a complement to Good Z.
What would be the effect of a fall in the price of Good X?
A Only the demand for X will rise.
B Demand for X, Y and Z will rise.
C Demand for Y will fall and for Z will rise.
D Demand for Y will rise and for Z will fall.
7 The market for tractors is supplied by two firms, X and Y, each
initially having 50 % of the market.
A 10 % increase in the price of tractors leads to an increase in output
from firm X of 10 % and from firm Y of 20 %.
What is the price elasticity of supply of tractors in this market?
A1 B 1.5 C2 D3
8 Good X is a substitute for Good Y and a complement to Good Z.
What would be the effect of a fall in the price of Good X?
A Only the demand for X will rise.
B Demand for X, Y and Z will rise.
C Demand for Y will fall and for Z will rise.
D Demand for Y will rise and for Z will fall.
9 Assume that rice is a substitute for potatoes.
If there is a decrease in the supply of potatoes, what is likely to happen
to the market for rice in the short run?
A Demand will decrease and the price will decrease.
B Demand will increase and the price will increase.
C Supply will decrease and the price will increase.
D Supply will increase and the price will decrease.
10 The table shows a consumer's expenditure on a range of goods at
different levels of income. For which good does the consumer have an
income elasticity of demand greater than zero, but less than one?
ANS : 1A 2 3A 4 5 6D 7 8D 9 10 B