The income elasticity is +2 and income increases by 20% sales were 5000 units, what will they be now ?

Related Mcqs:

1. The price elasticity of supply is +4 The price increases by 15% sales were originally 200 units What will they be now ?

   A. 80 units
   B. 320 units
   C. 60 units
   D. 120 units

2. Average income increase from Rs20,000 p.a to Rs 22,000 p.a Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ?

   A. Demand is price inelastic
   B. The good is inferior
   C. Income elasticity is -2
   D. The product is normal

3. Price increases from 10 to 12 pence and the price elasticity of demand is -0.5 The quantity demanded was 500 units. What will it be now ?

   A. 550 units
   B. 500 units
   C. 450 units
   D. 490 units

4. An increase in price from 25 pence to 30 pence leads to an increase in the quantity supplied from 40 units to 44 units. The price elasticity of supply is ?

   A. +2
   B. +0.5
   C. -2
   D. -0.5

5. The price decrease from Rs 2,000 to Rs 1,800 Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ?

   A. The price elasticity of demand is -2
   B. The good is inferior
   C. Income elasticity is + 0.5
   D. Income elasticity is + 2

6. In food demand growth equation D = Φ + a E, a is the income elasticity of demand for food E is the per capita income growth and Φ is ?

   A. Poverty rates
   B. food security index
   C. change in the quantity of food demanded per capita
   D. population growth

7. If consumers always spend 15 percent of their income on food. then the income elasticity of demand for food is ?

   A. 1.50
   B. 1.15
   C. none of these
   D. 0.15
   E. 1.00

8. Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raises its price Rs40 per month the number of subscribers will fall to 20000 Using the midpoint method for calculating the elasticity what is the price elasticity of demand for cable TV in Small Town ?

   A. 1.4
   B. 0.66
   C. 0.75
   D. 2.0

9. Total increases from Rs500 to Rs600 when output increases from 20 to 30 units. Fixed costs are Rs200 Which of the following is true ?

   A. Marginal cost is Rs20
   B. Average cost falls
   C. Variable cost rises by Rs100
   D. Average fixed cost is Rs10

10. If the quantity demanded of beef increases by 5% when the price of chicken increase by 20% the cross-price elasticity of demand between beef and chicken is ?

    A. -4
    B. 0.25
    C. 4
    D. -0.25