Quiz about elasticity
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This document defines key concepts relating to elasticity, including: price elasticity of demand which measures how quantity demanded responds to price changes; perfectly elastic demand where quantity demanded changes significantly with small price changes; inelastic demand where quantity demanded changes less than price; and perfectly inelastic demand where quantity demanded does not change with price. It also defines similar concepts for price elasticity of supply.
Quiz about elasticity
- 2. It is the measure of the extent to which the quantity demanded of a good changes when the price of the good changes. ANS: PRICE ELASTICITY OF DEMAND
- 3. It is ______ demand if the quantity demanded changes by a very large percentage in response to an almost zero percentage change in price. ANS: PERFECTLY ELASTICE
- 4. It is ______ demand if the percentage change in the quantity demanded is less than the percentage change in price. ANS: INELASTIC DEMAND
- 5. It is ______ demand if the quantity demanded remains constant as the price changes. ANS: PERFECTLY INELASTIC DEMAND
- 6. It is independent of the units used to measure price and quantity ANS: ELASTICITY
- 7. A measure of the extent to which the quantity supplied of a good changes when the price of the good changes. ANS: PRICE ELASTICITY OF SUPPLY
- 8. The percentage change in the quantity supplied equals the percentage change in price. ANS: UNIT ELASTIC SUPPLY
- 9. The percentage change in the quantity supplied is less than the percentage change in price ANS: INELASTIC SUPPLY
- 10. The percentage change in the quantity supplied is zero when the price changes ANS: PERFECTLY INELASTIC SUPPLY
- 11. The percentage change in the quantity supplied exceeds the percentage change in price. ANS: ELASTIC SUPPLY