Title: Quiz: Elasticity Of Demand And Supply Quiz
Course: Business_Economics_ > Section: Module3

Q: What is the primary focus of the module discussed in the text?
- Understanding consumer behavior
- Analyzing production techniques
- Exploring marketing strategies
- Studying financial accounting
A: Understanding consumer behavior

Q: Who benefits from understanding price elasticity of demand according to the text?
- Only economists
- Policymakers and businesses
- Only consumers
- Only marketing professionals
A: Policymakers and businesses

Q: When is a good considered elastic based on price elasticity of demand?
- When PED is less than 1
- When PED is equal to 1
- When PED is greater than 1
- When PED is equal to 0
A: When PED is greater than 1

Q: How is income elasticity of demand calculated?
- Percentage change in price divided by percentage change in quantity demanded
- Percentage change in quantity demanded divided by percentage change in income
- Percentage change in income divided by percentage change in price
- Percentage change in quantity supplied divided by percentage change in price
A: Percentage change in quantity demanded divided by percentage change in income

Q: Why is understanding supply elasticity important for businesses?
- It helps in setting consumer prices
- It allows for quick adjustments in production levels
- It determines the market demand
- It influences consumer preferences
A: It allows for quick adjustments in production levels

Q: What does a positive value of cross elasticity of demand indicate?
- The goods are complements
- The goods are substitutes
- The goods are necessities
- The goods are luxuries
A: The goods are substitutes

Q: How does the availability of substitutes affect price elasticity of demand?
- It makes demand more inelastic
- It has no effect on demand
- It makes demand more elastic
- It reduces consumer choices
A: It makes demand more elastic

Q: What type of goods has an income elasticity of demand greater than 1?
- Necessities
- Inferior goods
- Normal goods
- Luxury goods
A: Luxury goods

Q: In what scenario would a business likely raise prices according to the principles of elasticity?
- When demand is elastic
- When demand is inelastic
- When demand is unitary
- When demand is negative
A: When demand is inelastic

Q: How can businesses use insights from price elasticity of demand to stabilize revenue?
- By focusing solely on elastic goods
- By diversifying product lines to include both elastic and inelastic goods
- By ignoring consumer preferences
- By reducing production costs
A: By diversifying product lines to include both elastic and inelastic goods