27th Oct Elasticity of Demand Quiz 3 – Punjab Meritorious School Preparation Portal

Welcome to your 27 Oct Elasticity of Demand Quiz 3 CBT TEST

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If the price elasticity of demand for a commodity is less than unity, a decrease in price would result in:

Proportionately less increase in the quantity demanded.

Proportionately more increase in the quantity demanded.

Increase in total expenditure on the product.

None of these

Price elasticity Demand of a good is (-) 3 It shows that:

When price falls by 1%, demand rises by 3%

When price rises

Either (a) or (b)

Neither (a) nor (b)

The Indian Government imposed heavy taxes on commodity to reduce its consumption Such heavy taxes will decrease the demand of the commodity only when:

With increase in price of burgers by 22%, its demand falls by 25%. This indicates that demand for burgers is:

Elastic

Inelastic

Unitary elastic

Perfectly elastic

Which one of the following statements is incorrect:

Higher numerical value of elasticity indicates larger effect of a price change on the quantity demanded

Elasticity of demand can vary only between-1 and +1.

The demand curves for all commodities which have unitary elastic demand will be rectangular hyperbola

Elasticity of demand establishes a qualitative relationship between quantity demanded of a commodity and its price, while other factors remain constant.

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