The Economic Quiz

6 Questions | Total Attempts: 30

Settings
Please wait...
Economics Quizzes & Trivia

.


Questions and Answers
  • 1. 
    If the absolute price elasticity of demand for good Y is 0.75, when there is a 30 percent increase in price, we can conclude that quantity demanded
    • A. 

      Has fallen by 40.0 percent

    • B. 

      Has fallen by 10.4 percent

    • C. 

      Has fallen by 35.0 percent

    • D. 

      Has fallen by 22.5 percet

  • 2. 
    An absolute price elasticity of demand equal to 0.4 indicates that a
    • A. 

      10 percent decrease in price leads to a 4 percent increase in quantity demanded

    • B. 

      4 percent increase in price leads to a 10 percent decrease in quantity demanded

    • C. 

      1 percent increase in price leads to a 4 percent decrease in quantity demanded

    • D. 

      0.4 percent decrease in price leads to a 1 percent increase in quantity demanded

  • 3. 
    Suppose the demand for frozen  yogurt cones increases from 400 to 425 cones a day when the price is reduced from $1.50 to $1.25. In this situation, the elasticity of demand, calculated using the average method is
    • A. 

      1.33

    • B. 

      3

    • C. 

      1

    • D. 

      0.33

  • 4. 
    If the price elasticity of demand for apples is greater than 1, an increase in apple prices will
    • A. 

      Not affect total revenue

    • B. 

      Raise total revenue

    • C. 

      Either raise or lower total revenue but it is impossible to determine which

    • D. 

      Lower total revenue

  • 5. 
    If total revenues decline when the market clearing price increases, then we know that
    • A. 

      Demand is elastic

    • B. 

      Demand has zero elasticity

    • C. 

      Demand is unit-elastic

    • D. 

      Demand is inelastic

  • 6. 
    Total revenues reach a maximum when
    • A. 

      Demand is elastic

    • B. 

      Demand is inelastic

    • C. 

      Price elasticity is at minimum

    • D. 

      Demand is unit-elastic