Review

Elasticity GRE
Grade 10
EN
 01
Work together with your friends to
answer all the questions

02 Answer the questions by turn

Rules 03
For correct question, will lead to the
next step

04
If your answer wrong, you will back
to question no.1

05 Good Luck
2
Ready
1. What is price elasticity of demand?

A measure of the extent to which price changes

when the quantity demanded changes GUTE
N TAG
A measure of the extent to which the quantity
demanded changes when price changes

A measure of the extent to which total revenue

changes when price changes

A measure of the extent to which price changes

when total revenue changes
2. The price of a product rises from $60 to $90. This causes demand to
contract from 800 to 600. what type of price elasticity of demand does
this product have over this price change?

Perfectly elastic

inelastic

unity

Elastic
3. What is the Price Elasticity of Supply when the Price change from 2
to 3?

0.33

0.8

0.4

1.25
4. Which of the following is the function of PED?

Calculate the firm’s competitive position

Enable to identify the consumer

Help the government to determine tax revenue

Calculate the capability of firm to produce

5. In what circumstance would supply of a product be elastic?

It is costly to produce

It takes time to produce

It can be stored

It uses resources which are in short supply

6. What that a PES of 2.5 indicate?

Supply is elastic

Supply is perfectly elastic

Supply is perfectly inelastic

Supply is inelastic
7. What characteristic is likely to make the
demand for a product elastic?
It is a necessity

It is habit-forming

It is relatively cheap

It has close substitutes

8. Demand for product is inelastic.
What effect will a fall in price have?
Demand will not change

Demand will change by greater percentage

Total revenue will fall

Total revenue will rise

9. Proportionate change in the quantity demanded
greater than proportionate change in income indicate
the value of YED is…
Income elastic

Income inelastic

Zero income elasticity

Negative income elasticity

10. When the PES means inelastic, which of the following statement is
correct?

It is easy to the firm provide the goods

It is difficult to provide the goods

The changing in price not really influence the

supply

The good is inferior good

11. The quantity demanded for good rice will sensitive to change in
price of noodle. What is the correct statement about the information?

Rice is positive cross elasticity of demand of

noodle

Rice is negative cross-elasticity of demand of

noodle
Noodle is positive cross-elasticity of demand of
rice
Noodle is negative cross-elasticity of demand of
rice
12. Which of the following is the function of YED?

Calculate the firm’s competitive position

Enable to identify the consumer/market

Help the government to determine tax revenue

Calculate the capability of firm to produce

13. Which products are likely to have a negative cross-elasticity of
demand with tea?

Biscuit and cakes

Coffee and biscuit

Coffee and hot chocolate

Milk and coke

14. Which elasticity values indicate that cars are normal good?

YED is negative

YED is positive

XED is negative

XED is positive
15. When is the supply curve for a car manufacturing
firm most likely to be price elastic?

When it easy to recruit new labour

When the firm has limited stock

When the operation is in short run

When the operation is full capacity

16. What can be indicated from the curve?

It’s unit elastic of Price elasticity of demand

It shows inelastic in Income elasticity of demand

It shows negative cross-elasticity of demand

It perfectly elastic of Price elasticity of supply

17. What would be the most likely reason for a firm’s decision to
calculate the XED?

To help the government to determine tax

revenue

Predict the total revenue of a firm

Calculate the firm’s competitive position

Identify the market/consumers of the product

18. What is the formula of XED?

The proportionate change in quantity demanded is

divided by the proportionate change in income
The proportionate change in quantity demanded for
product X divided by the proportionate change in price
product Y
The proportionate change in quantity demanded for
product X divided by the proportionate change in demand
of product Y

The proportionate change in price of product X divided by

the proportionate change in demand of product Y
19.What can be indicated from the curve?

It shows YED is income elastic

It shows demand of normal good

It shows demand of inferior good

It shows YED is zero

20. The YED is 0.5 what is indicate?

Income elastic

Income inelastic

Unitary income elasticity

Zero income elasticity