Elasticity of Demand Quiz - ICSE Class 12 Economics
Free practice quiz: Elasticity of Demand (ICSE Class 12 Economics). 52 multiple-choice questions with answers and explanations. Play online, no sign-up needed.
This ICSE Class 12 Economics practice quiz has 52 multiple-choice questions on Elasticity of Demand, and 52 of them come with an explanation. Try the 5 sample questions below (tap an option to check yourself), then play the full quiz online. No sign-up needed.
Start quiz: 52 questions, freeSample questions
When the price of a good decreases by 10%, the quantity demanded increases by 20%. What is the price elasticity of demand for this good?
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Answer: B. -2
Price Elasticity of Demand (PED) = (% Change in Quantity Demanded) / (% Change in Price). Here, % Change in Qd = 20% and % Change in P = -10%. So, PED = 20% / -10% = -2. The negative sign indicates the inverse relationship between price and quantity demanded.
A government imposes a tax on a product. The burden of the tax will fall more heavily on the consumers if the demand is:
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Answer: B. Inelastic and supply is elastic
The incidence of a tax (who bears the burden) depends on the relative elasticities of demand and supply. The side of the market with the less elastic (more inelastic) curve will bear a larger portion of the tax burden. If demand is inelastic and supply is elastic, consumers (demand side) will bear more of the tax.
The elasticity of supply measures the responsiveness of the quantity supplied of a good to a change in its:
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Answer: B. Price of the good
Elasticity of supply (PES) is defined as the percentage change in quantity supplied in response to a one percent change in the price of the good, holding other factors constant.
If the price of a good increases from $10 to $15, and the quantity demanded falls from 100 to 80 units, what is the point elasticity of demand at P=$10?
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Answer: A. -0.4
To calculate point elasticity, we need the slope of the demand curve. Assuming a linear demand curve, the slope (ΔP/ΔQ) = (15-10)/(80-100) = 5/-20 = -1/4. Point Elasticity = (P/Q) * (1/Slope) = (10/100) * (1/(-1/4)) = (1/10) * (-4) = -0.4.
If the price elasticity of demand for a product is -2.5, a $1 increase in price for a product originally priced at $10 will result in:
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Answer: A. A 25% decrease in quantity demanded
The price elasticity of demand (PED) is -2.5. The percentage change in price is not explicitly given as a percentage, but rather a $1 increase from $10. The percentage change in price is ($1/$10) * 100% = 10%. PED = (% Change in Quantity Demanded) / (% Change in Price). Therefore, % Change in Quantity Demanded = PED * (% Change in Price) = -2.5 * 10% = -25%. This represents a 25% decrease in quantity demanded.
More questions in this quiz
Answers and explanations are in the full quiz.
- If a 5% increase in the price of good X leads to a 15% decrease in the quantity demanded of good Y, what is the cross-price elasticity of demand between X and Y?
- A firm's total revenue increases when the price of its product increases. This implies that the demand for the product is:
- Which of the following scenarios would result in perfectly inelastic demand?
- Income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in:
- If the income elasticity of demand for a good is -0.7, the good is considered a(n):
- When the price of a good increases by 10%, the quantity demanded decreases by 10%. The demand curve for this good is:
- The demand for salt is typically considered to be:
- If the demand for a product is elastic, a decrease in price will lead to:
- Consider the demand for a product with many close substitutes. This demand is likely to be:
- If the price of coffee increases by 15%, and the quantity demanded of tea (a substitute) increases by 10%, what is the cross-price elasticity of demand between coffee and tea?
- A product is considered a luxury good if its income elasticity of demand is:
- The demand for a specific brand of smartphone is likely to be more elastic than the demand for smartphones in general because:
- If the price elasticity of demand is -0.4, a 10% decrease in price will lead to a:
- Which of the following demand curves represents perfectly elastic demand?
- If the income elasticity of demand for a good is 0.8, and consumer income increases by 10%, what is the expected percentage change in the quantity demanded?
- Which of the following factors would make demand for a good MORE elastic?
- If a 5% increase in the price of good A causes a 10% decrease in the quantity demanded of good B, this indicates that A and B are:
- When the price of a good decreases from $50 to $40, and the quantity demanded increases from 200 units to 250 units, the demand is:
- If the price elasticity of demand for a good is 0, it means the demand is:
- A firm finds that when it lowers the price of its product, its total revenue falls. This suggests that the demand for the product is:
- Which of the following is a determinant of price elasticity of demand?
- If the price of good X increases by 20%, and the quantity demanded of good Y decreases by 10%, what is the cross-price elasticity of demand?
- A 5% increase in income causes a 2% decrease in the quantity demanded of a good. This good is a(n):
- If the price of a good falls by 15%, and the quantity supplied decreases by 10%, what is the price elasticity of supply?
- The demand for a good is likely to be more elastic if:
- If the price of a product increases by 25%, and the total revenue decreases, the demand must be:
- A decrease in the price of gasoline leads to a smaller percentage increase in the quantity demanded of gasoline. This implies that the demand for gasoline is:
- Which of the following is true for a Giffen good?
- The demand for a specific brand of bottled water is likely to be _____ than the demand for water in general.
- If a 10% increase in the price of good X leads to a 10% increase in the quantity demanded of good Y, what is the cross-price elasticity of demand between X and Y?
- Total revenue is maximized when the price elasticity of demand is:
- If the income elasticity of demand for a good is 0, it means the demand for the good is:
- When the price of a good increases by 8%, the quantity demanded decreases by 4%. The demand for this good is:
- Which factor is LEAST likely to affect the price elasticity of demand for a good?
- If the price of good A decreases by 10%, and the quantity demanded of good B increases by 5%, what is the cross-price elasticity of demand?
- The demand for electricity is typically considered inelastic because:
- Which of the following goods is most likely to have inelastic demand?
- The period of time allowed for consumers to adjust to a price change affects price elasticity of demand. In general, demand is:
- If a 5% increase in the price of apples leads to a 10% decrease in the quantity demanded of oranges, it suggests that apples and oranges are:
- Which of the following statements about elasticity is INCORRECT?
- The concept of elasticity is primarily concerned with:
- If the price of a good increases, and the total revenue from that good remains unchanged, then the demand for the good must be:
- Which of the following demonstrates perfectly elastic supply?
- The price of a good increases by 10%. As a result, the quantity supplied increases by 15%. The price elasticity of supply is:
- If a government imposes a tax on a product, the burden of the tax will fall more heavily on the producers if the supply is:
- Which of the following is a determinant of the price elasticity of supply?
- If the price of a good increases by 20%, and the quantity supplied decreases by 10%, this contradicts the law of supply, as the price elasticity of supply is:
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