01
True or false
1 point
True or false: Elasticity measures how strongly one economic variable responds to a change in another variable, using percentage changes.
Free Practice Quiz Question List
Elasticity: Interpretation, Calculation, and Applications Online Quiz Questions
Use this free practice quiz with 10 questions to review Elasticity: Interpretation, Calculation, and Applications, test your knowledge, and prepare for your next test or exam.
10 questions
02
Choose one
1 point
Which statement correctly distinguishes a movement along a demand curve from a shift of the demand curve?
- A
A change in the good's own price moves along the existing demand curve, while a change in household income shifts the demand curve.
- B
A change in the good's own price shifts the demand curve, while a change in household income moves along the existing demand curve.
- C
Both a change in the good's own price and a change in household income move along the existing demand curve.
- D
Both a change in the good's own price and a change in household income shift the demand curve.
03
True or false
1 point
True or false: A binding price ceiling set below the equilibrium price creates a shortage because quantity demanded exceeds quantity supplied.
- A
True
- B
False
04
Choose one
1 point
A supermarket sells one particular brand of bottled water and also sells bottled water as a broad category. Which statement best predicts their relative price elasticity of demand?
- A
Demand for a narrowly defined brand with many close substitutes is usually more inelastic than demand for a broad category.
- B
Demand for a narrowly defined brand with many close substitutes is usually more elastic than demand for a broad category.
- C
Demand elasticity is necessarily identical for a brand and for the entire product category.
- D
Demand for a broad product category is always perfectly elastic.
05
Choose all
1 point
Select all conditions that generally make demand for a product more price elastic.
- A
The product has many readily available substitutes.
- B
Consumers have more time to adjust their behavior.
- C
The product is an essential good with no practical alternatives.
- D
The product takes a large share of the consumer's budget.
06
Choose one
1 point
A firm raises its price while demand for its product is inelastic. What will generally happen to the firm's total revenue over that interval?
- A
Total revenue decreases because fewer units are sold.
- B
Total revenue remains exactly unchanged in every case.
- C
Total revenue generally increases because demand is inelastic.
- D
There is not enough information to determine the direction of total revenue.
07
Written response
1 point
Household income rises by 5%, and demand for restaurant meals rises by 10%. What is the income elasticity of demand? Enter the numerical value.
08
Fill in the blank
1 point
Complete each statement. A positive cross-price elasticity indicates that two goods are . A negative cross-price elasticity indicates that two goods are .
09
Choose one
1 point
Why is the supply of harvested agricultural goods often more inelastic in the short run than in the long run?
- A
A farmer can immediately expand a harvested wheat crop, so short-run supply is more elastic.
- B
Supply is always equally elastic in the short run and long run.
- C
Long-run supply is more inelastic because producers have more adjustment options.
- D
Short-run supply is often more inelastic than long-run supply because production adjustments take time.
10
Written response
1 point
A per-unit tax is $3, and 800 units are sold after the tax. What is the government's tax revenue? Enter the whole-dollar value.