MCQs - Elasticity of Demand Commerce Notes | EduRev

Crash Course of Micro Economics -Class 12

Commerce : MCQs - Elasticity of Demand Commerce Notes | EduRev

The document MCQs - Elasticity of Demand Commerce Notes | EduRev is a part of the Commerce Course Crash Course of Micro Economics -Class 12.
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Q.1 On all points of rectangular hyperbola, elasticity of demand is equal in:

(a) Unity

(b) Zero
(c) Infinity
(d) Greater than one
Ans: A

Q.2 Slope of the demand curve is estimated as:
(a) - Dp/Dq
(b) Dp/Dq
(c) Dq/Dp
(d) p/q
Ans: A

The elasticity of demand for a product will not be higher when:

(a) it is considered a necessity by its buyers
(b) it has several uses.

(c) more substitutes for the product are available
(d) it is an expensive commodity
Ans: A

Which of the following will have elastic demand ?

(a) Matchbox
(b) NCERT Textbooks
(c) Medicines
(d) Air Conditioners
Ans: D

Which of the following statements is incorrect:

(a) Higher numerical value of elasticity means larger effect of a price change on the quantity demanded.
(b) Elasticity of demand can vary only between  - 1 and + 1.

(c) The demand curves for all commodities which have unitary elastic demand will be rectangular hyperbola.

(d) Elasticity of demand establishes a quantitative relationship between quantity demanded of a commodity and its price, while other factors remain constant.
Ans: B

The demand for a product would be more inelastic:
(a) the greater is the time under consideration
(b) the less expensive is the product 

(c) the greater is the number of substitutes available
(d) all the above
Ans: B

Relationship between price and demand in elasticity of demand is of ........... nature ?

(a) Qualitative
(b) Quantitative
(c) Competitive
(d) None of these
Ans: B

What would be the nature of elasticity of demand for Giffen Goods ?
(a) Positive
(b) Negative
(c) Neutral
(d) None of these
Ans: A

Which of following has elastic nature of demand ?

(a) Electricity
(b) Fruits
(c) Medicines
(d) Pulses.
Ans: B

Keeping the health of the public in mind, the government imposes heavy tax on the   consumption of a good. Its restricted consumption will be determined by whether its price elasticity of demand is : (Choose the correct alternative)

(a) 1
(b) More than 1
(c) Less than 1
(d) Zero
Ans: B

Q.11 Identify the good whose demand would not respond to rise in its price : 

(a) salt
(b) life saving drugs
(c) textbooks
(d) All of these
Ans: D

Keeping the welfare of the masses of the masses in mind, the government should be very considerate in fixing the prices of life savings drugs, as their price elasticity of demand is : 

(a) Zero
(b) 1
(c) Less than 1
(d) More than one
Ans: C

In case of perfectly inelastic demand for a commodity, its quantity demanded : 

(a) remains the same
(b) increases.
(c) decreases
(d) None of these
Ans: C Q.14 Suppose there is downward sloping straight line demand curve which is 8 cm long touching both the axis. Then, price elasticity of demand at point 4 cm away on demand curve is
(a) 2
(b) 1
(c) 0.5
(d) cannot be determined
Ans: B

The subject matter of elasticity of demand is :

(a) direction of change in quantity in response to change in own price of the commodity

(b) degree of change in response to change in own price of the commodity

(c) absolute change in quantity in response to change in own price of the commodity 

(d) none of these
Ans: B

As the flatness of the demand curve increases, the elasticity of demand becomes:

(a) higher
(b) lower
(c) equal to infinity
(d) equal to zero
Ans: A

For a commodity, delta P / P = (-) 0.2 and elasticity of demand = (-) 0.3, the percentage change in quantity demanded is:
(a) 6
(b) 40
(c) (-) 6
(d) 10
Ans: A

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