PrepGo

AP Microeconomics Practice Quiz: Other Elasticities

Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026

Test your understanding with short quizzes. This quiz has 10 questions to check your progress.

Question 1 of 10

How is the income elasticity of demand measured?

All Questions (10)

How is the income elasticity of demand measured?

A) The percentage change in quantity demanded divided by the percentage change in consumers' income.

B) The percentage change in price divided by the percentage change in quantity demanded.

C) The percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.

D) The percentage change in consumers' income divided by the percentage change in total expenditure.

Correct Answer: A

The provided text explicitly states, "Income elasticity of demand is measured by the percentage change in the quantity demanded divided by the percentage change in consumers' income."

What is the primary purpose of calculating the cross-price elasticity of demand?

A) To determine the impact of a price change on a firm's total revenue.

B) To determine whether a good is normal or inferior.

C) To determine whether two goods are substitutes, complements, or not related.

D) To measure the responsiveness of quantity supplied to a change in consumer income.

Correct Answer: C

The content states, "Economists use the cross-price elasticity of demand to determine whether goods are substitutes, complements, or not related."

If the income elasticity of demand for a good is calculated to be -1.5, an economist would classify this good as:

A) A normal good.

B) An inferior good.

C) A substitute good.

D) A complementary good.

Correct Answer: B

The text explains that economists use income elasticity to determine if a good is normal or inferior. A negative value indicates an inverse relationship between income and quantity demanded, which is the definition of an inferior good.

A positive cross-price elasticity of demand between two goods, Good X and Good Y, indicates that:

A) Good X and Good Y are complements.

B) Good X and Good Y are substitutes.

C) Good X is an inferior good.

D) Good Y is a normal good.

Correct Answer: B

A positive cross-price elasticity means that an increase in the price of one good leads to an increase in the quantity demanded of the other. This relationship defines the goods as substitutes.

If a 5% increase in the price of smartphones leads to a 10% decrease in the quantity of smartphone cases demanded, what is the cross-price elasticity of demand between these two goods?

A) 0.5

B) -0.5

C) 2.0

D) -2.0

Correct Answer: D

Cross-price elasticity of demand is the percentage change in quantity demanded of one good divided by the percentage change in the price of another. The calculation is (-10%) / (5%) = -2.0.

Suppose that when average consumer income increases by 20%, the quantity of new cars demanded increases by 10%. What is the income elasticity of demand for new cars?

A) 2.0

B) -2.0

C) 0.5

D) -0.5

Correct Answer: C

Income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in consumers' income. The calculation is (10%) / (20%) = 0.5.

An economist observes that when consumer incomes rise by 4%, the quantity demanded of canned soup falls by 2%. Based on this information, the income elasticity of demand for canned soup is:

A) 2.0, and it is a normal good.

B) -2.0, and it is a substitute good.

C) 0.5, and it is a normal good.

D) -0.5, and it is an inferior good.

Correct Answer: D

The income elasticity is calculated as (% change in quantity demanded) / (% change in income) = (-2%) / (4%) = -0.5. Because the result is negative, the good is classified as an inferior good.

According to the provided text, which statement accurately reflects the scope of elasticity measurement in economics?

A) Elasticity can only be measured for the price of a good and consumer income.

B) Elasticity is a concept that applies exclusively to the determinants of demand.

C) Elasticity can be measured for any determinant of demand or supply.

D) The only useful measures of elasticity are price elasticity and income elasticity.

Correct Answer: C

The text explicitly states: "Elasticity can be measured for any determinant of demand or supply, not just the price." This indicates the broad applicability of the concept.

Consider the following data for two goods, coffee and tea. When the price of coffee rises from $3.00 to $3.30 per cup, the quantity of tea demanded per week increases from 500 to 600 cups. What is the cross-price elasticity of demand for tea with respect to the price of coffee?

A) 2.0

B) 0.5

C) -2.0

D) -0.5

Correct Answer: A

First, calculate the percentage change in the price of coffee: (($3.30 - $3.00) / $3.00) * 100 = 10%. Next, calculate the percentage change in the quantity of tea demanded: ((600 - 500) / 500) * 100 = 20%. The cross-price elasticity is (% change in Qd of tea) / (% change in P of coffee) = 20% / 10% = 2.0.

The cross-price elasticity of demand between movie tickets and popcorn is found to be -0.7. Which of the following scenarios is consistent with this value?

A) A decrease in the price of movie tickets leads to a decrease in popcorn sales.

B) An increase in the price of movie tickets leads to an increase in popcorn sales.

C) A decrease in the price of movie tickets leads to an increase in popcorn sales.

D) A change in the price of movie tickets has no effect on popcorn sales.

Correct Answer: C

A negative cross-price elasticity indicates that the goods are complements. This means a decrease in the price of one good (movie tickets) will cause an increase in the quantity demanded of the other good (popcorn), as people are more likely to buy both together.