Economics

Question 1

1Price falls from GH¢8 to GH¢6 and quantity rises from 40 to 60. PED (point method from initial values) is

Hard

A. 1.5 B. 0.5 C. 2 D. 1

Question 2

2Cross elasticity of demand between substitutes is

Medium

A. always infinite B. zero C. positive D. negative

Question 3

3If PED = 1, demand is

Easy

A. perfectly elastic B. inelastic C. perfectly inelastic D. unitary elastic

Question 4

4Demand for salt is likely to be

Easy

A. perfectly elastic B. highly elastic C. price inelastic D. unitary elastic

Question 5

5An inferior good has an income elasticity of demand that is

Medium

A. zero B. positive C. negative D. infinite

Question 6

6Two goods with a positive cross elasticity of demand are

Medium

A. complements B. substitutes C. inferior goods D. unrelated

Question 7

7Price elasticity of supply measures

Easy

A. income changes B. how quantity supplied responds to price changes C. tax changes D. demand changes

Question 8

8The supply of fresh tomatoes is usually inelastic in the short run because

Easy

A. they take time to grow and cannot be stored long B. they are luxuries C. they are imported D. farmers dislike them

Question 9

9If PED is 0.4, a 10% price rise reduces quantity demanded by

Easy

A. 10% B. 40% C. 4% D. 0.4%

Question 10

10Supply of agricultural produce is inelastic in the short run because

Hard

A. storage is unlimited B. production takes time C. demand is fixed D. prices are fixed