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

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

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

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dNone of these

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


atransportation

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btaxi rides

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cbus tickets

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d airline tickets

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View Answer transportation

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


aprice elastic

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bnone of these answers

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cunit price elastic

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dprice inelastic

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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.

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

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

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dnone of these answers

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


a Supply would tend to be price elastic

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bnone of these answers

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cdemand would tend to be price inelastic

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ddemand would tend to be price elastic

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


aelastic in the upper portion and inelastic in the lower portion

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binelastic in the upper portion and elastic in the lower portion

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cinelastic throughout

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dconstant along the demand curve

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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

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b Rs 30 per month

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cRs 40 per month

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

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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

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b0.66

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c0.75

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d2.0

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View Answer 1.4

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


ainfinite

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bZero

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cless than 1

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dnone of these

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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

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b1.15

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cnone of these

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d1.00

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View Answer 1.00

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