Important MCQs of Elasticity of Demand Microeconomics class 11

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Multiple choice Questions of Elasticity of Demand with answers of Microeconomics class 11 CBSE

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If there is no change in demand for commodity ‘X’, even after rise in its price, then its demand is:

a) Perfectly Elastic
b) Perfectly Inelastic
c) Less Elastic
d) Highly Elastic

Ans – b)

The Elasticity of demand for a product will not be higher:

a) When it is considered a necessity by its buyers
b) When less substitutes for the product are available
c) When it has serveral uses
d) When it is an expensive commodity

Ans – a), b)

Demand for a good is less elastic when:

a) Percentalge change in price > Percentage change in quantity demanded
b) Percentage change in quantity demanded > Percentage change in price
c) Percentage change in price = Percentage change in quantity demanded
d) Demand curve is steeper

Ans – a), d)

Which of the following will have elastic demand?

a) Matchbox
b) Coke
c) Medicines
d) Air Conditioners

Ans – b)

If the price elasticity of demand for a commodity is less than unity, a decrease in price would result in:

a) Proportionately less increase in the quantity demanded
b) Proportionately more increase in the quantity demanded
c) Increase in total expenditure on the product
d) None of these

Ans – a)

Which one of the following statements is incorrect:

a) Higher numerical value of elasticity indicates larger effect of a price change on the quantity demanded
b) Elasticity of demand can vary only between -1 and +1
c) The demand curves for all commodities which have unitary elastic demand will be rectangular hyperbola.
d) Elasticity of demand estbalishes a qualitative relationship between quantity demanded of a commodity.

Ans – b), d)

If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in its price, then elasticity of demand
is:

a) > 1
b) = 1
c) < 1
d) = 0

Ans – c)

Price elasticity of demand is best defined as:

a) Change in the tastes of consumers at different prices.
b) change in demand when income of the consumer increases
c) The rate of response of demand to a change in price
d) The rate of response of demand to change in price of related goods

Ans – c)

Which of the following influence price elasticity of demand?

a) Nature of the commodity
b) Income level
c) Availability of substitutes
d) All of these

Ans – d)

A negative sign with coefficient of price elasticity of demand denotes:

a) Direct relation between price and quantity demanded
b) Inverse realtion between price and quantity deamnded
c) No relation between price and quantity demanded
d) None of these

Ans – b)

A 5% fall in the price of X leads to a 10% rise in its deamnd. In case of Good Y, a 2% rise in price leads to a 6% fall in its demand.
In the given case, __ is more elastic.

a) X
b) Y
c) Both X and Y are equally elastic
d) Both X and Y are inelastic

Ans – b)

In case of __ there is an infinite demand at a particular price and demand becomes zero with a slight rise in price.

a) Perfectly inelastic demand
b) Highly elastic demand
c) Less elastic demand
d) Perfectly elastic demand

Ans – d)

If a good takes up significant share of consumer’s budget, it will be:

a) Less elastic
b) Highly elastic
c) Unitary elastic
d) Perfectly elastic

Ans – b)

If there is no change in quantity demanded to any change in price, then demand is and demand curve is _ .

a) Perfectly elastic, horizontal straight line
b) Perfectly elastic, vertical straight line
c) perfectly inelastic, horizontal straight line
d) perfectly inelsatic, vertical straight line

Ans – d)

If the demand for a good is made by a rich consumer, its demand is generally:

a) Less elastic
b) Highly elastic
c) Unitary elastic
d) Perfectly elastic

Ans – a)

A firm is currently selling 10,000 units of its product per month. The firm plans to reduce the retail price from ₹1 to ₹0.99. From
the previous experience, the firm knows that th eprice elasticity of demand for the product is (-) 1.5. Assuming no other changes, the firm
can now expect the sales of:

a) 8,500 units
b) 10,500 units
c) 11,000 units
d) 11,500 units

Ans – d)

The demand for meals at a medium priced restaurant is elastic. If the management of hte restaurant is considering raising prices, it can expect
a relatively:

a) Proportionately large fall in quantity demanded
b) No change in quantity demanded
c) Proportionately small fall in quantity demanded
d) infinte change in quantity demanded

Ans – a)

With incrase in price of bugers by 22%, its demand falls by 25%. This indicates that demand for burger is:

a) Elastic
b) Inelastic
c) Unitary Elastic
d) Perfectly Elastic

Ans – a)

Price Elasticity of Demand of a good is (-) 3. It shows that:

a) When price falls by 1%, demand rises by 3%
b) When price rises by 1%, demand falls by 3%
c) Either a) or b)
d) Neither a) nor b)

Ans – c)

The Indian Government imposed heany taxes on commodity to reduce its consumption by the public. Such heavy taxes will decrease the demand
of the commodity only when:

a) Ed = 0
b) Ed > 1
c) Ed < 1
d) Ed = 1

Ans – b)

If the percentage change in quantity supplied of commodity X is more than the percentage change in price of the commodity X, the coefficient
of price elasticity of supply would be _ .

a) Es = 1
b) Es < 1 c) Es = 0 d) Es > 1

Ans – d)

The coefficient of price elasticity of supply of a good is 3. It is known as _ .

a) Unitary Elastic Supply
b) Perfectly Inelastic Supply
c) Elastic Supply
d) Inelastic Supply

Ans – c) 