SAN AGUSTIN INSTITUTE OF TECHNOLOGY

City of Valencia
Name: _________________________________________ Date: _________
Course and Year: ___________________________ Score: ____

Core BA: Microeconomics

3rd Quiz

Test I: Modified Multiple Choice: Choose the correct answer of the following questions and
answer in the blank space provided:

N. Luxury Goods F. Substitute A. Price Elasticity of

O. Necessity G. Elastic Demand Supply
P. Normal Goods H. Inelastic Supply B. Unitary Elastic
Q. Inferior Goods I. Inelastic Demand Supply
R. Unitary Goods J. Unitary Elastic Demand C. Total Revenue
S. X and Y are not K. Price elasticity of demand D. Elasticity
Related L. Cross Elasticity of demand E. Elastic Supply
T. Complements M. Income Elasticity of
Demand

1. _____. A measure of the responsiveness of quantity demanded or quantity supplied to one of its
determinants.
2. _____. Demand measures how much the quantity demanded responds to a change in price.
Demand for a good is said to be elastic if the quantity demanded responds substantially to
changes in the price. Demand is said to be inelastic if the quantity demanded responds only
slightly to changes in the price.
3. _____. We refer to total as the total sale of product by the producer or seller.
4. _____. It is the degree of responsive of a percentage change in quantity demanded with a
percentage change in Income.
5. _____. It is the degree of responsiveness of a percentage change in quantity.
6. _____. The cross elasticity of demand for substitute goods is always positive because
the demand for one good increases when the price for the substitute good increases.
7. _____. Alternatively, the cross elasticity of demand for complementary goods is negative. As the
price for one item increases, an item closely associated with that item and necessary for its
consumption decreases because the demand for the main good has also dropped.
8. _____. Is study how to measure the relationship quantity supplied and price or can identify if
the quantity supplied cab adjust to changes in price.
9. _____. Where the price of elasticity of Demand which is equal to (=) 1.
10. _____. Where the price of elasticity of Supply which is less than to (<) 1.
11. _____. Where the price of elasticity of Demand which is greater than to (>) 1.
12. _____. Where the income elasticity of Demand is greater than (>)1.
13. _____. Where the income elasticity of Demand is greater than (<)1.
14. _____. Where the income elasticity of Demand is greater than (>)0.
15. _____. Where the income elasticity of Demand is greater than (<)0.
16. _____. Where the income elasticity of Demand is equal to (=)1.
17. _____. Where the cross elasticity of Demand is Equal to (=) 0.
18. _____. Where the cross elasticity of Demand is Less than to (<) 0.
19. _____. Where the cross elasticity of Demand is Less than to (>) 0.
20. _____. A positive cross elasticity of demand.
21. _____. A negative cross elasticity of demand.
II Applications: Solve the following problem or cases which are given below.

1. Ifel James sells ginamos for P 8.00 per pieces, where the demand for it is 500. When he wants
to raises it by P10.00, the quantity demanded diminish by 20%. At what price will James
maximize his profit? Thus, the demand is elastic, inelastic or unitary?
2. Elexes Josh selling bakbak in the farmers market. At price of P100 per kilo, he decided to cut
the price to P75 per kilo since it was already early evening. Moreover, he noticed that as he
was estimated the quantity demand of 100, now it was increased in 150%. With that decision,
is the demand is elastic, inelastic or unitary?
3. Justine work as bank manager in BDO with a monthly salary of P50,000. In her budget plan,
she only buys worth of P5,000 new dresses. As the year passed by, her salary was increased to
P10,000 due to hard work and efforts to maintain the quality of services and growth of
business branch financially. As her salary rise up, she also increases her budget plan in buying
new dresses to P15,000. What do you think the demand for her new dresses? It is normal,
inferior, necessity or luxury?
4. Suppose that the kilo of brown sugar is P30.00 and the seller can produce 500 sacks of them.
When the price rose to P35 per kilo, the producer has increased his production to 50%. How
elastic is his supply for noddle’s?
5. The regular Banana ships price is worth of P15. With that price, the supplier can produce only
1000 pcs of it. When the price increase to P20, the supplier tripled its production. Solve the
elasticity of Supply.

God bless us all!!!!

Julsar T. Calonia
Instructor