Price determination and elasticity quiz (Singapore O-Level Economics 2286) quiz

The price at which quantity demanded equals quantity supplied, so the market clears

The highest price any buyer will pay

The price set by the government

The average of all prices charged

A surplus develops and price is pushed down

A shortage develops and price is pushed up toward equilibrium

The market is already in balance

Supply rises to meet demand instantly

A lower price and lower quantity

A higher price and lower quantity

A higher price and higher quantity

No change in price or quantity

Change in price divided by change in quantity

Percentage change in quantity demanded divided by percentage change in price

Total revenue divided by quantity

Percentage change in income divided by percentage change in quantity

Price-elastic

Perfectly elastic

Unit-elastic

Price-inelastic

Increase total revenue, because quantity falls proportionally less than price rises

Decrease total revenue

Leave total revenue unchanged

Reduce total revenue to zero

$-0.25$

$-2.5$

$-1$

$+2.5$

A luxury holiday

One brand of soft drink among many

Salt, a cheap necessity with few substitutes

A designer handbag

An inferior good

A public good

A complement

A normal good, and likely a luxury since YED is greater than 1

Substitutes, because a positive XED means a rise in one good's price raises demand for the other

Complements

Unrelated goods

Inferior goods

A very short time period

A longer time period in which firms can adjust output

No spare capacity at all

Perishable goods that cannot be stored

Because the tax will drastically cut sales

Because consumers will stop buying them entirely

Because demand falls only a little, so the tax raises a large and stable revenue

Because firms will leave the market

Quantity, with little change in price

The number of firms only

Neither price nor quantity

Price, with little change in quantity

Demand for a normal good rises with income, while demand for an inferior good falls as income rises

Inferior goods are always of poor quality

Normal goods have no substitutes

Inferior goods always have elastic demand

Raise total revenue

Leave total revenue unchanged, because quantity changes in the same proportion as price

Lower total revenue

Always reduce quantity to zero