Deck 7: Supply and Demand Elasticity

Question 1

A fall in income of the consumer, other things being equal, causes:

A)Increase in demand
B)Decrease in demand
C)Increase in quantity demanded
D)Decease in quantity demanded

Answer 1

Increase in demand

Question 2

Which of the following causes an increase in supply:

A)Fall in price of inputs
B)Increase in number of producers
C)Decrease in the price of production substitutes
D)All of the above

Answer 2

All of the above

Question 3

A movement down the given demand curve shows:

A)Increase in demand
B)Decrease in demand
C)Extension in demand
D)Contraction in demand

Answer 3

Extension in demand

Question 4

Which of the following results in an increase in an increase in demand:

A)Fall in prices of substitutes
B)Increase in price of complementary goods
C)Fall in consumer's income
D)None of the above

Question 5

An increase in supply means:

A)Movement down given supply curve
B)Movement upward given supply curve
C)Leftward shift in supply curve
D)Rightward shift in supply curve

Question 6

An increase in market supply, demand remaining the same causes:

A)Increase in equilibrium price
B)Decrease in equilibrium quantity
C)Decrease in equilibrium price and increase in equilibrium quantity
D)Both equilibrium price and quantity rises

Question 7

Which one of the following elasticities takes the average of prices and quantities:

A)Point elasticity of demand
B)Arc elasticity of demand
C)Income elasticity of demand
D)Cross elasticity of demand

Question 8

When demand curve is rectangular hyperbola, the value of price elasticity of demand will be:

A)Zero
B)One
C)Greater than one
D)Infinity