Back to quiz

6. Income elasticity of demand measures how demand responds to a change in income

  • True
  • False

7. What are the different types of elasticity?

  • Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply
  • Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply, Cross elasticity of Supply
  • Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply, Disposable income elasticity of Supply, Investment elasticity of Supply

8. The formula for income elasticity of demand is % change in quantity demanded (divided by) % change in income

  • True
  • False

9. What does a steep demand curve show with PED?

  • That demand is relatively price inelastic
  • The demand is relatively price elastic

10. When XED is positive, the goods are said to be..

  • Inferior
  • Complentary
  • Independent

11. Price elasticity of supply is always a positive number

  • False
  • True

12. If cross elasticity of demand is postive, the goods are said to be..

  • Free
  • Substitutes
  • Independent

13. What does elasticity measure?

  • The shift in the demand curve
  • The proportionate responsiveness of the second variable to the change in the first variable
  • How far the change of one variable can be stretched to reach that of the first variable

14. What is the formula for price elasticity of supply?

  • % change in quantity supplied (divided by) % change in price
  • % change in qd of good A (dividided by) % change in price of good B
  • % change in price (divided by) % change in supply

15. The formula for XED is: % change in quantity demanded of good A (dividided by) % change in price of good B

  • True
  • False