Question : When all other factors influencing demand are held constant, the cross elasticity of demand quantifies how much the quantity required of a good responds to changes in the .
Option 1: Income of the consumer
Option 2: Price of the commodity
Option 3: Price of the other commodity
Option 4: None of the above
Correct Answer: Price of the other commodity
Solution : The cross elasticity of demand measures how much a good must be produced in reaction to changes in the price of the other item, holding all other demand-inducing variables constant. Hence option c is the correct answer.
Question : Which one is not the type of elasticity of demand?
Option 1: Price elasticity of demand
Option 2: Income elasticity of demand
Option 3: Cross elasticity of demand
Option 4: Consumer elasticity of demand
Question : Cross elasticity of demand measures the responsiveness of quantity demanded to changes in:
Option 1: Price of a substitute good.
Option 2: Price of a complementary good.
Option 3: Income.
Option 4: Both a) and b).
Question : The percentage change in _______ divided by the percentage change in _______ is the income elasticity of demand.
Option 1: The quantity demanded; income
Option 2: Income; the price
Option 3: Income; the quantity demanded.
Option 4: The price; income
Question : Which of the following is a characteristic of demand elasticity?
Option 1: It measures the responsiveness of quantity demanded to changes in price.
Option 2: It measures the responsiveness of quantity supplied to changes in price.
Option 3: It measures the responsiveness of demand to changes in income.
Option 4: It measures the responsiveness of demand to changes in the cost of production.
Question : Income elasticity of demand measures the responsiveness of quantity demanded to changes in:
Option 1: Price.
Option 2: Income.
Option 3: Population.
Option 4: Advertising expenditure.
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