CMA Foundation MCQ Quiz Economics Lesson 1.3 – Part 2April 8, 2026 Maven Leave a Comment Welcome to the CMA Foundation MCQ Quiz Economics Lesson 1.3 – Part 2 quiz! Name Email 1. Price elasticity of demand is defined as: Proportionate change in price divided by proportionate change in demand Proportionate change in demand divided by proportionate change in income Proportionate change in supply divided by proportionate change in price Proportionate change in demand divided by proportionate change in price None 2. When the demand curve is parallel to the X axis, price elasticity of demand is: Infinity Greater than one One Zero None 3. Salt and life saving drugs are examples of: Perfectly elastic demand Unitary elastic demand Relatively elastic demand Perfectly inelastic demand None 4. The price elasticity of demand for luxury goods is: Ep = 0 Ep = 1 Ep > 1 Ep < 1 None 5. In the total outlay method, if price falls and total expenditure also falls, elasticity of demand is: Ep > 1 Ep = 1 Ep < 1 Ep = 0 None 6. In the point method, elasticity of demand is measured as: Upper segment ÷ Lower segment Lower segment ÷ Upper segment Total segment ÷ Upper segment Upper segment ÷ Total segment None 7. The demand curve for unitary elastic demand is: Vertical line Horizontal line Rectangular hyperbola Downward sloping straight line None 8. If the price of coffee rises and the demand for tea also rises, the cross elasticity between tea and coffee is: Negative Zero Positive Infinity None 9. Which of the following goods has negative income elasticity of demand? Normal goods Superior goods Comfort goods Inferior goods None 10. The arc method of measuring elasticity is used when: Changes in price and demand are very small The demand curve is a rectangular hyperbola Elasticity is measured at a specific point on the curve Changes in price and demand are large None 11. Comfort goods have which type of price elasticity of demand? Ep > 1 Ep = 0 Ep = 1 Ep = ∞ None 12. A firm should produce at a level where price elasticity of demand is relatively elastic because: Marginal revenue is negative at that level Marginal revenue is positive at that level Marginal cost is zero at that level Total revenue is minimum at that level None 13. Which of the following determinants makes demand more elastic? No substitutes available Good is a necessity Many substitutes available Purchase cannot be postponed None 14. In the total outlay method, if price rises and total expenditure remains constant, elasticity of demand is: Ep > 1 Ep < 1 Ep = 0 Ep = 1 None 15. At the midpoint of a straight line demand curve, price elasticity of demand is: Equal to one Infinity Zero Greater than one None Time's upRelated Posts:CMA Foundation MCQ Quiz Economics Lesson 1.3 - Part 1CMA Foundation MCQ Quiz Economics Lesson 1.2CMA Foundation MCQ Quiz Economics Lesson 1.1CMA Foundation MCQ - Sources of Law
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