Economics MCQs

Page No. 189

If a supply curve for a good is price elastic then ?


athe quantity supplied is sensitive to changes in the price of that good


bThat quantity demanded is insensitive to changes in the price of that good


cthe quantity demanded is sensitive to changes in the price of that good


dNone of these



The demand for which of the following is likely to be the most price inelastic ?


atransportation


btaxi rides


cbus tickets


d airline tickets


View Answer transportation

in general a flatter demand curve is more likely to be ?


aprice elastic


bnone of these answers


cunit price elastic


dprice inelastic


View Answer price inelastic

The price elasticity of demand is defined as ?


a the percentage change in the quantity demanded divided by the percentage change in income.


bthe percentage change in income divided by the percentage change in the quantity demanded


cthe percentage change in the quantity demanded of a good divided by the percentage change in the price of that good


dnone of these answers



If consumers think that there are very few substitutes for a good, then ?


a Supply would tend to be price elastic


bnone of these answers


cdemand would tend to be price inelastic


ddemand would tend to be price elastic



If demand is linear (a straight line) then price elasticity of demand is ?


aelastic in the upper portion and inelastic in the lower portion


binelastic in the upper portion and elastic in the lower portion


cinelastic throughout


dconstant along the demand curve



Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raise its price to Rs 40 per month the number of subscribers will fall to 20000 At which of the following price does small Town Cablevision earn the greatest total revenue ?


aRs 0 per month


b Rs 30 per month


cRs 40 per month


dEither Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0


View Answer Rs 30 per month

Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raises its price Rs40 per month the number of subscribers will fall to 20000 Using the midpoint method for calculating the elasticity what is the price elasticity of demand for cable TV in Small Town ?


a1.4


b0.66


c0.75


d2.0


View Answer 1.4

If supply is price inelastic the value of the price elasticity of supply must be ?


ainfinite


bZero


cless than 1


dnone of these


View Answer less than 1

If consumers always spend 15 percent of their income on food. then the income elasticity of demand for food is ?


a1.50


b1.15


cnone of these


d1.00


View Answer 1.00

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