Quiz in Economics

1. It refers to how sensitive the demand for a good is to changes in other economic
variables, such as prices and consumer income. (DEMAND ELASTICITY)
2. What is the meaning of ceteris paribus? (we are considering the price of the good
itself as the only factor affecting the demand, constant)
3. They are way to regulate prices and set either above or below the market equilibrium.
(Price control)
4. If the coefficient of price of elasticity is equal to 1, demand is _____________. (UNIT-
ELASTIC / UNITARY ELASTIC)
5. Demand for low-priced goods or inferior goods increases as consumers get richer are
called __________? (normal goods)
6. If the elasticity coefficient is less than 1, then price elasticity of demand for the good is
_____________. (INELASTIC)
7. Referred to as the balance between all different consumers and producers. (Market
equilibrium)
8. .relates to the responsiveness of quantity demanded of a good to the change in the price. (Price
Elasticity of Demand)
9. What are the three concepts of Demand Elasticity?
(PRICE, INCOME AND CROSS ELASTICITY)
10. Minimum prices set by the government for certain commodities and services that it
believes are being sold in an unfair market with too low of a price and thus their
producers deserve some assistance. (Price Floor)
11. A decrease in demand is caused by (d)
a. Lower price of substitute goods
b. Lower price of complementary goods
c. Lower income
d. All of the above
12. A type of income elasticity of demand which is the rise in income is proportionate to the
increase in the quantity demanded. (Unitary)
13. Has zero price elasticity, which implies that the quantity demanded stays the same, no
matter what the change in price is. (PERFECTLY INELASTIC DEMAND)
14. May lead to lower supply and a shortage. (Maximum prices)
15. Two goods are _____________ if one good cannot be consumed without the other.
(complements)
16. It represents consumer demand in mathematical form. It specifies the relationship
between the price of the good and the various quantities that a consumer is willing and
able to buy. (Demand Function)
17. Are maximum prices set by the government for particular goods and services that they
believe are being sold at too high of a price and thus consumers need some help
purchasing them. (Price ceiling)
18. Are the factors that influence the price and availability of goods and services in a market
economy. (Market forces)