Economics chapter 4. AS level

1. 1If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent
   increase in the quantity demanded, the price elasticity of demand is

   1. AA. 0.083
      
   2. BB. 0.30
      
   3. CC. 0.83
   4. D
      D. 0.60
2. 2The demand for movies is unit elastic if

   1. AA) any increase in the price leads to a 1 percent decrease in the quantity demanded
   2. BB) a 5 percent decrease in the price leads to an infinite increase in the quantity demanded
   3. CC) a 5 percent increase in the price leads to a 5 percent decrease in the quantity demanded
   4. DD) a 5 percent increase in the price leads to a 5 percent increase in total revenue.
3. 3The demand curve in the figure above illustrates the demand for a product with

   

   1. AA) unit price elasticity of demand at all prices
   2. BB) infinite price elasticity of demand
   3. C C) zero price elasticity of demand at all prices.
   4. DD) a price elasticity of demand that is different at all prices
4. 4On a linear demand curve that intersects both axes

   1. A A) the elasticity is less than 1.00 at all prices.
   2. BB) the elasticity equals 1.00 at all prices
   3. CA) the elasticity decreases as the price falls and quantity increases.
   4. DD) the elasticity exceeds 1.00 at all prices.
5. 5Producers' total revenue will increase if

   1. AA) income falls and the good is a normal good
   2. BB) the price rises and demand is inelastic.
   3. CC) the price rises and demand is elastic
   4. DD) income increases and the good is an inferior good.
6. 6A fall in the price of X from $12 to $8 causes an increase in the quantity of Y demanded from 900 to
   1,100 units. X and Y are

   1. AA) normal goods.
   2. BB) Complements
   3. CC) Inferior goods.
   4. DD) substitutes
7. 7The above figure illustrates the demand curve for a good. The good has

   

   1. AA) many substitutes
   2. BB) a few substitutes
   3. CC) No substitutes
   4. DD) Only one substitute
8. 8When the quantity of coal supplied is measured in kilograms instead of pounds, the demand for
   coal becomes

   1. AA) neither more nor less elastic.
   2. BB) more elastic.
   3. CC) less elastic.
   4. DD) Inelastic.
9. 9Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000
   gallons per week as a consequence of a 10 percent increase in the price of root beer. The price
   elasticity of demand is

   1. AA) 1.66.
   2. BB) 6.00.
   3. CC) 0.60
   4. DD) 1.40
10. 10a refinery which processes oil into petrol (gas) is faced with the following conditions
    1. it is working at full capacity
    2. it requires six months to train new workers to qualify in safety procedures
    3. it has received delivery of a new fleet of petrol tankers to transport its petrol
    4. its petrol storage tanks are full
    
    which of the conditions will tend to make the supply of petrol relatively price inelastic?

    1. AA) 1 and 2
    2. BB) 1 and 4
    3. CC) 3 and 4
    4. DD) 2 and 3

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Quiz on Economics chapter 4. AS level, created by khenden.tshering on 17/10/2014.

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khenden.tshering

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