Price Elasticity, Income Elasticity and Cross Elasticity of Demands Quiz by Shubhrata Shrestha | May 21, 2025 | 0 comments Price Elasticity, Income Elasticity and Cross Elasticity of Demands Quiz 1. What does a negative cross elasticity of demand indicate? A) The goods are substitutes B) The goods are unrelated C) The goods are complements D) Demand is inelastic None 2. When PED = 1, what happens to total revenue when price changes? A) Revenue increases B) Revenue decreases C) Revenue remains unchanged D) Revenue doubles None 3. A product with PED > 1 is considered: A) Inelastic B) Elastic C) Perfectly inelastic D) Unitary elastic None 4. If the price of tea increases and the demand for coffee increases, their XED is: A) Negative B) Positive C) Zero D) Infinite None 5. YED for an inferior good is: A) Positive and > 1 B) Negative C) Zero D) Positive and < 1 None 6. What does it mean if XED = 0? A) Goods are unrelated B) Goods are substitutes C) Goods are complements D) Demand is unitary None 7. If price increases by 10% and quantity demanded falls by 5%, the PED is: A) -2 B) -0.5 C) 0 D) 1 None 8. Which of the following is most likely to be perfectly inelastic? A) Luxury cars B) Cigarettes for an addicted smoker C) Soft drinks D) Smartphones None 9. The formula for income elasticity of demand is: A) %∆Qd / %∆P B) %∆Qd / %∆Income C) %∆Price / %∆Qd D) %∆Qd of A / %∆P of B None 10. Which of the following factors does NOT affect PED? A) Availability of substitutes B) Time period C) Cost of production D) Proportion of income spent None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
