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Gillespie: Foundations of Economics 2e

Unit 04

Instructions

Choose your answer by clicking the radio button next to your choice and then press 'Submit' to get your score.

Question 1

Average income increases from £20,000 p.a. to £22,000 p.a. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?

Question 2

The price decreases from £2,000 to £1,800. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?

Question 3

If the price elasticity of demand is unit then a fall in price:

Question 4

If the cross elasticity of demand is -2:

Question 5

The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will they be now?

Question 6

The price elasticity of demand is a negative number this means:

Question 7

Price increases from 10 to 12 pence and the price elasticity of demand is -0.5. The quantity demanded was 500 units. What will it be now?

Question 8

If demand is price inelastic:

Question 9

For an inferior good:

Question 10

For a normal good: