Choose the correct answer for each question in the quiz
The price decreases from €2,000 to €1,800. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?
PED is -2.
The good is inferior.
PED is 2.
The good is inelastic.
If the Price Elasticity of Demand is unit elastic, then a fall in price:
Reduces revenue.
Leaves revenue unchanged.
Increases revenue.
Reduces costs.
The Price Elasticity of Demand is a negative number this means:
Demand is price elastic.
Demand is price inelastic.
The demand curve is downward sloping.
An increase in income will reduce the quantity demanded.
Suppose the price of a product increases from €50 to €70 and the quantity supplied rises from 40 a day to 80. What is the Price Elasticity of Supply?
0.5.
-0.5.
2.5.
-2.5.
If demand is price inelastic:
An decrease in price will raise revenue.
An increase in price decreases revenue.
An increase in price increases revenue.
A decrease in price reduces sales.
Which of the following statements is false?
Income elasticity of demand is positive for inferior products.
Income elasticity of demand is negative for inferior products.
Income elasticity of demand is positive for normal goods.
None of the above.
Suppose the quantity demand of a product increases from 32 units to 40 units and income increases from €20,000 to €22,000. What is the Income Elasticity of Demand?
0.4.
-0.4.
-2.5.
+2.5.
The demand curve for a product will be more elastic when:
The amount of income spent on the product is small.
There are many substitutes.
Quantity demanded is unresponsive to a change in price.
Consumers have insufficient time to adjust to changes in price.
If the Price Elasticity of Demand is elastic, then a fall in price:
Reduces revenue.
Leaves revenue unchanged.
Increases revenue.
Reduces costs.
If Price Elasticity of Demand is -2.4, the product is:
