In case of a straight line demand curve meeting the two axes, the price elasticity of demand at the midpoint of the line would be:

1

(a)

0

(b)

1

(c)

1.5

(d)

2

Identify the factor which generally keeps the price elasticity of demand for a good low

1

(a)

Variety of uses for that good

(b)

Its low price

(c)

Close substitutes for that good

(d)

High proportion of the consumer's income spent on it 

Identify the coefficient of price elasticity of demand when the percentage increase in the quantity of good demanded is smaller than the percentage fall in its price

1

(a)

Equal to one.

(b)

Greater than one.

(c)

Smaller than one

(d)

Zero

The price elasticity of demand for hamburger is

1

(a)

the change in the quantity demanded of hamburger when the hamburger increases by 30 paise per rupee

(b)

the percentage increase in the quantity demanded of hamburger when the price of hamburger falls by 1 percent per rupee.

(c)

the increase in the demand for hamburger when the price of hamburger falls by 10 percent per rupee.

(d)

the decrease in the quantity demanded of hamburger when the price of hamburger falls.by 1 percent per rupee

The price elasticity of demand is defined as the responsiveness of:

1

(a)

price to a change in quantity demanded.

(b)

quantity demanded to a change in price

(c)

price to a change in income.

(d)

quantity demanded to a change in income

Price elasticity of demand explains qualitative relationship between price and demand.

1

(a) True

(b) False

On a demand curve where it touches X-axis elasticity of demand is Infinity?

1

(a) True

(b) False

If percentage change in demand is greater than percentage change in price, it will be less elastic.

1

(a) True

(b) False

When demand curve is Rectangular hyperbola, ED > 1.

1

(a) True

(b) False

When price and demand fall in equal proportion, elasticity of demand is unity.

1

(a) True

(b) False

Define price elasticity of demand.

1

(a)

The degree of responsiveness of quantity demanded to changes in price of the commodity is known as price elasticity of demand.

Why is price elasticity of demand has negative sign always?

1

(a)

Price elasticity of demand is generally negative because of the inverse relationship between price and quantity demanded.

Give the formula for measuring price elasticity of demand according to percentage method.

1

(a)

Elasticity of demand (ED) =\({Percentage \ change \ in \ quantity \ Demanded \over percentage \ change \ in \ Price}\)

Define perfectly inelastic demand.

1

(a)

If price changes, and quantity demand remains constant, ed = 0 and the result is known as perfectly inelastic demand.

Define perfectly elastic demand

1

(a)

If quantity demand changes and price remains constant, ed = \(\infty\) and the result is known as perfectly elastic demand.