Concept of Elasticity And Its Application - SS2 Economics Past Questions and Answers - page 1
1
What does elasticity measure?
View related lesson
A
The number of resources available in an economy.
B
The total amount of economic activity in an economy.
Â
C
The amount of government regulation in an economy.
D
The responsiveness of one economic variable to changes in another economic variable.
2
What is the price elasticity of demand?
View related lesson
A
The responsiveness of quantity supplied to changes in price.
B
The responsiveness of quantity demanded to changes in price.
C
The responsiveness of quantity demanded to changes in income.
D
The responsiveness of quantity demanded of one good to changes in the price of another good.
3
Why is elasticity important in economics?
View related lesson
A
It helps us understand how changes in one economic variable affect other economic variables.
Â
B
It helps us measure the total amount of economic activity in an economy.
C
It helps us determine the amount of government regulation in an economy.
D
It helps us calculate the number of resources available in an economy.
4
How does elasticity affect pricing decisions for firms?
View related lesson
A
If the elasticity of demand for a product is low, firms may choose to increase prices to increase demand.
B
If the elasticity of demand for a product is high, firms may choose to keep prices low to increase demand.
C
Elasticity has no effect on pricing decisions for firms.
D
Firms always choose to keep prices high to increase profits.
5
How is elasticity used to help allocate resources in an economy?
View related lesson
A
If the elasticity of demand for a certain type of labor is high, firms may be more willing to hire workers with that skill set.
B
Elasticity has no effect on resource allocation in an economy.
C
If the elasticity of demand for a certain type of labour is low, firms may be less willing to hire workers with that skill set
D
If the elasticity of demand for a certain type of labour is high, firms may be less willing to hire workers with that skill set.
6
How can elasticity be used to help governments make taxation decisions?
View related lesson
7
Why is the price elasticity of demand an important concept for firms?
View related lesson
Loading lesson…