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Multiple Choice Quiz
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1
The price elasticity of demand measures:
A)the change in quantity demanded of a good given a change in income.
B)the change in quantity demanded of a good given a change in the price of another good.
C)the change in the quantity demanded of a good given a change in the price of the good.
D)the change in the quantity demanded of a good given a change in the price elasticity of supply.
2
If a good has price-inelastic demand,
A)a 1 percent increase in price produces less than a 1 percent decrease in the quantity demanded.
B)a 1 percent increase in price produces less than a 1 percent increase in the quantity demanded.
C)a 1 percent increase in price produces more than a 1 percent increase in the quantity demanded.
D)a 1 percent increase in price produces more than a 1 percent decrease in the quantity demanded.
3
When the price is 5, the quantity demanded is 10. When the price is 7, the quantity demanded is 5. What is the price elasticity of demand?
A)1
B)0.5
C)0.33
D)2
4
A perfectly inelastic demand curve will be ______ on a graph while a perfectly elastic demand curve will be ______ on a graph.
A)vertical; horizontal
B)horizontal; vertical
C)vertical; vertical
D)horizontal; horizontal
5
P x Q =
A)MC
B)TR
C)MR
D)TC
6
A percentage change in quantity supplied divided by a percentage change in price is called:
A)income elasticity.
B)price elasticity of demand.
C)price elasticity of supply.
D)elasticity of substitution.
7
When the price is 5, the quantity supplied is 10. When the price is 10, the quantity supplied is 20. What is the price elasticity of supply?
A)1
B)0.5
C)0.33
D)2
8
The burden of a gasoline tax will be borne mostly by _______ because the demand curve is relatively _______.
A)producers; inelastic
B)producers; elastic
C)consumers; inelastic
D)consumers; elastic
9
If demand is inelastic relative to supply, most of the burden of a tax will be borne by ______.
A)consumers
B)producers
C)firms
D)none of the above
10
Price ceilings generally lead to:
A)unemployment.
B)shortages.
C)surpluses.
D)none of the above.





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