Elasticity Quiz

Which of the following is a key vocabulary term related to elasticity?

• Scarcity

• Quantity

• Specialisation

• Rational

What is the significance of demand elasticity in a competitive market?

• It determines the color of products

• It affects the amount of revenue a firm receives

• It changes the weight of products

• It influences the size of products

Which of the following is NOT a key vocabulary term related to elasticity?

• Coefficient

• Elasticity

• Opportunity Cost

• Scarcity

For a price inelastic product, what happens when the price is increased?

• Demand decreases, total revenue increases

• Demand increases, total revenue decreases

• Demand and total revenue both increase

• Demand and total revenue both decrease

In elasticity theory, what does a negative sign (-) indicate?

• A negative relationship

• A positive relationship

• No relationship

• A constant relationship

What type of market is described as having a high coefficient for PED?

• Monopoly

• Oligopoly

• Saturated market

• Emerging market

What does a perfectly inelastic demand curve look like?

• Vertical line

• Horizontal line

• Upward sloping line

• Downward sloping line

Which factor does NOT influence the price elasticity of demand?

• Time period considered

• Availability of substitutes

• Color of the product

• Consumer income

What does a price elasticity of demand (PED) value of -2 indicate?

• Demand is inelastic; quantity demanded is relatively unresponsive to price changes.

• Demand is elastic; a 1% change in price leads to a 2% change in quantity demanded.

• Demand is unitary; quantity demanded changes at the same rate as price.

• Demand is perfectly inelastic; quantity demanded does not change with price.

If PED = 0, how would consumers respond to a price increase?

• Demand would increase slightly.

• Demand would decrease slightly.

• Demand would not change at all.

• Demand would decrease proportionally to the price change.