Chapter 5 Reading Quiz Answer

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Chapter 5 Reading Quiz

Question 1

When consumers are very sensitive to changes in price, their demand is 

  1. inelastic 
  2. elastic
  3. inferior
  4. normal 

 
Question 2

If the price elasticity of demand is 0.98 the demand is 

  1.   elastic 
  2. inelastic
  3. perfectly inelastic
  4. unit elastic 

 

Question 3

The price of a cheeseburger rises from $2.65 to $2.85 and the quantity demanded changes from 490 to 485. What is the price elasticity of demand?

  1.   7 
  2. -0.01
  3. 0.07
  4. 0.14

 

Question 4

Which of the following items would likely have an inelastic supply?

  1.  custom painted pottery
  2. microwave ovens
  3. laptops
  4. t-shirts 

 

Question 5

A 20% change in price leads to a 16% change in quantity supplied. What is the price elasticity of supply?

  1.  E = 0.8 supply is elastic 
  2.   E = 0.8 supply is inelastic 
  3. E = 1.25 supply is inelastic 
  4. E = 1.25 supply is elastic 

 

Question 6

The income elasticity of a good is – 1.72.  The good is _____________ and demand is ______________ .

  1.   inferior and demand is elastic
  2. normal and demand is inelastic
  3. normal and demand is elastic
  4. inferior and demand is inelastic 

 

Question 7

When price elasticity of demand of a particular good is inelastic, this means that demand is

  1. not responsive to changes in price
  2. not responsive to changes in income
  3. very responsive to changes in income
  4. very responsive to changes in price 

 

Question 8

When income falls and quantity demanded also falls, the good is 

  1.   inferior
  2. elastic
  3. normal
  4.   inelastic 

 

Question 9

Income falls from $80,000 to $76,000 and quantity demanded changes from 320 to 460. Calculate the elasticity and what type of good is this?

  1.   E = 7, normal good
  2. E = 0.14, normal good
  3. E = -0.14, inferior good 
  4. E = -7, inferior good 

 

Question 10

Which of the following will likely have an inelastic demand?

  1.   potato chips
  2. water
  3. soda 
  4. tacos 

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Chapter 5 Reading Quiz Answers

 

 

Question 1

When consumers are very sensitive to changes in price, their demand is 

inelastic 
elastic
inferior
normal 

 

Answer: B.  elastic

This question is taken from Econ 102 – Principles of Macroeconomics » Spring 2022 » Quizzes