Lesson 2.6.3

2.6.3 Determinants and usefulness of elasticity Quiz: OCR Economics, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.6.3, Determinants and usefulness of elasticity: 20 multiple choice questions for the OCR Economics (H460), Unit 2: The role of markets, written with Revision Ninja.

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The 20 questions

  1. Which factor makes the price elasticity of demand for a product more elastic?

    • Addictive nature
    • Short time period
    • Availability of substitutes
    • High brand loyalty

  2. What type of product has a negative income elasticity of demand?

    • Luxury good
    • Normal good
    • Complementary good
    • Inferior good

  3. If cross elasticity of demand between two goods is negative, how are they related?

    • Unrelated goods
    • Complements
    • Inferior goods
    • Substitutes

  4. Which factor increases the price elasticity of supply for a business?

    • Long production lag
    • Spare production capacity
    • Immobile factors
    • Raw material shortages

  5. A firm increases the price of a product with price elastic demand. Total revenue will:

    • Reach zero
    • Decrease
    • Increase
    • Remain constant

  6. Who bears the main burden of an indirect tax on a good with inelastic demand?

    • Shared equally
    • The government
    • The consumer
    • The producer

  7. Which numerical value represents unit price elasticity of demand?

    • Minus 1
    • Minus 0.5
    • Infinity
    • Zero

  8. During an economic boom with rising real incomes, which products see the highest demand growth?

    • Inferior goods
    • Luxury goods
    • Inelastic goods
    • Necessity goods

  9. If a competitor cuts the price of a substitute good, what happens to demand for the firm's product?

    • Demand remains constant
    • Demand decreases
    • Demand increases
    • Supply increases

  10. How does price elasticity of supply change over a longer time period?

    • It becomes inelastic
    • It becomes elastic
    • It becomes zero
    • It stays unchanged

  11. Price rises by 10% and quantity demanded falls by 20%. What is the price elasticity of demand?

    • Plus 2
    • Minus 20
    • Minus 0.5
    • Minus 2

  12. Why are high indirect taxes effective at raising government revenue on cigarettes?

    • Demand is inelastic
    • Demand is unitary
    • Demand is elastic
    • Supply is inelastic

  13. A product has an income elasticity of demand of plus 0.4. What type of good is it?

    • Complementary good
    • Normal necessity
    • Inferior good
    • Luxury good

  14. How does high perishability affect the price elasticity of supply of agricultural goods?

    • Makes supply inelastic
    • Has no effect
    • Makes supply elastic
    • Makes supply unit-elastic

  15. How does spending a very small proportion of income on a good affect its price elasticity of demand?

    • Demand is inelastic
    • Demand is infinite
    • Demand is unitary
    • Demand is elastic

  16. Two products have a cross elasticity of demand of plus 3.5. How are they related?

    • Weak complements
    • Weak substitutes
    • Strong complements
    • Strong substitutes

  17. When price discriminating, a firm should charge a higher price in market segments where demand is:

    • Unitary
    • Perfectly elastic
    • Elastic
    • Inelastic

  18. Who receives most of the financial benefit when a government subsidises a product with elastic demand?

    • The consumer
    • Shared equally
    • The government
    • The producer

  19. Moving down a straight-line downward-sloping demand curve, price elasticity of demand:

    • Increases
    • Stays constant
    • Decreases
    • Equals minus one

  20. Price rises by 5% and quantity supplied increases by 15%. What is the price elasticity of supply?

    • Plus 0.33
    • Minus 3
    • Plus 10
    • Plus 3

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