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Chapters
1: Microeconomics and Macroeconomics: Introduction
2: Demand and Law of Demand
3: Theory of Consumer Behaviour: Marginal Utility and Indifference Curve Analysis
▶ 4: Elasticity of Demand
5: Supply - Law of Supply and Price Elasticity of Supply
6: Market Mechanism: Equilibrium Price and Quantity in a Competitive Market
7: Laws of Returns - Returns to a Factor and Returns to Scale
8: Cost and Revenue Analysis
9: Forms of Market
10: Producer's Equilibrium
11: Determination of Equilibrium Price and Output Under Perfect Competition
SECTION 2: THEORY OF INCOME AND EMPLOYMENT
12: Theory of Income and Employment
SECTION 3: MONEY AND BANKING
13: Money: Meaning and Functions
14: Banks: Commercial Bank and Central Bank
SECTION 4: BALANCE OF PAYMENTS AND EXCHANGE RATE
15: Balance of Payments and Exchange Rate
SECTION 5: PUBLIC FINANCE
16: Fiscal Policy
17: Government Budget
SECTION 6: NATIONAL INCOME
18: National Income and Circular Flow of Income
19: National Income Aggregates
20: Methods of Measuring National Income
SECTION 7: PROJECT WORK
21: Project Work
22: Model Short Answer Questions
![Frank solutions for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी chapter 4 - Elasticity of Demand - Shaalaa.com](/images/economics-english-class-12-isc_6:872f47036b5c4267ae061d4279703803.jpg "Frank solutions for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी chapter 4 - Elasticity of Demand")
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Solutions for Chapter 4: Elasticity of Demand
Below listed, you can find solutions for Chapter 4 of CISCE Frank for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी.
Frank solutions for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी 4 Elasticity of Demand TEST YOURSELF QUESTIONS [Pages 75 - 80]
Select the correct option for each of the following questions: (1 mark each)
What is the nature of relationship between price and demand in case of price elasticity of demand?
Qualitative
Quantitative
Competitive
None of these
What is the price elasticity of demand in case of a straight line demand curve parallel to X-axis?
ep = α
ep = 1
ep is greater than 1
ep is less than 1
When the demand curve is parallel to Y-axis, what would be its price elasticity of demand?
ep = 1
ep = α
ep is greater than 1
ep = 0
When the demand curve has the shape of rectangular hyperbola curve, the price elasticity of demand at all the points will be ______.
greater than one
less than one
equal to one
infinity
As we move along a downward sloping straight-line demand curve from left to right, price elasticity of demand ______
Goes on falling
Goes on rising
Remains the same
None of the above
What is the price elasticity of demand on the mid-point of the straight line demand curve starting from Y-axis and terminating at X-axis?
ep > 1
ep < 1
ep = 0
ep = 1
If there is no change in the demand for commodity X even when its price increases, the demand is said to be ______.
perfectly elastic
highly elastic
less elastic
perfectly inelastic
When percentage change in the quantity demanded of a commodity is equal to percentage change in its price, the demand curve for such a commodity will be ______.
unitary elastic
perfectly elastic
perfectly inelastic
none of these
If the expenditure on a good changes in the opposite direction of change in its price, the price elasticity of demand will be ______.
less than 1
greater than 1
expand to 1
equal to 0
When a fall in price of the commodity results in increase in total expenditure, the price elasticity of demand will be ______.
ep = 1
ep = 0
ep > 1
ep < 1
Given the following demand schedule:
| Price (₹) | Quantity (units) |
| 60 | 10 |
| 50 | 12 |
What would be the price elasticity of demand when the price falls from ₹ 60 to ₹ 50?
ep > 1
ep = 1
ep < 1
ep = 0
What would be the income elasticity of demand when an increase in income of the consumer leads to a fall in the amount purchased of a commodity?
Negative
Positive
Greater than 1
Less than 1
If two goods X and Y are substitute goods, what will be the cross elasticity of demand?
Negative
Zero
Positive
None of these
If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be ______.
greater than one
less than one
equal to zero
equal to infinity
Identify the correct pairs of items from the following Column 1 and Column 2.
| Column 1 | Column 2 |
| (1) Perfectly elastic demand | (a) Ed > 1 |
| (2) Perfectly inelastic demand | (b) Ed = ∞ |
| (3) Unitary elastic demand | (c) Ed = 0 |
| (4) Relatively elastic demand | (d) Ed = 1 |
Given below are two statements marked as Assertion (A) and Reason (R). Read the statements carefully and choose the correct option.
Assertion (A): A commodity which can be put to several uses, is price inelastic.
Reason (R): As price falls, the number of uses of a commodity increases and thereby the number of buyers in the market increases.
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Assertion (A): Price elasticity of demand is less than one in the case of inelastic demand.
Reason (R): Proportional change in the quantity demanded is less than the proportional change in price.
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Very Short Answer Questions (2 marks each)
Define price elasticity of demand.
Define income elasticity of demand.
What is cross elasticity of demand between two goods?
What is perfectly elastic demand?
What is perfectly inelastic demand between two goods?
What is meant by elastic demand?
What is meant by inelastic demand?
What is meant by unitary elastic demand?
What is the shape of the perfectly inelastic demand curve?
Draw a perfectly elastic demand curve.
Draw the demand curve showing unitary elastic demand all through.
When the demand remains the same with changes in its price, what will be the elasticity of demand and shape of the demand curve?
Draw demand curves showing elasticity equal to zero.
Draw the demand curve showing unitary elastic demand all through.
Draw a perfectly elastic demand curve.
Draw a diagram to show the elasticity of demand when it is greater than one.
Draw a diagram to show the elasticity of demand when it is less than one.
Draw the demand curve showing unitary elastic demand all through.
State the formula for calculating the price elasticity of demand using the percentage method.
Explain the Total expenditure method and Geometric method of measuring price elasticity of demand.
How does the total expenditure affect the price elasticity of demand?
Explain any 'two methods' of measuring price elasticity of demand.
Explain any 'two methods' of measuring price elasticity of demand.
What will be the elasticity of demand in the following situation?
When the proportionate change in quantity demanded is less than the proportionate change in price.
What will be the elasticity of demand in the following situation?
When the proportionate change in quantity demanded is equal to the proportionate change in price.
If the demand is inelastic, what will be the effect of a fall in price on consumer's total outlay (expenditure)?
If the demand is elastic, what will be the effect of a fall in price on consumer's total outlay?
What is the measure of price elasticity when total expenditure incurred by a household on a good remains unchanged with the change in the price of that good?
Would the elasticity of demand in the following case be unitary, less than unity or greater than unity?
A rise in the price of a commodity increases the total expenditure on it.
Would the elasticity of demand in the following case be unity, less than unity or greater than unity?
A rise in the price of a commodity reduces the total expenditure.
Which of the following commodities have inelastic demand: salt, a particular brand of lipstick, medicine, mobile phone, school uniform?
Draw three demand curves showing the same value of price elasticity of demand at all the points.
Draw a downward sloping straight line demand curve touching both the axes. Mark the price elasticity at different points on this demand curve.
What is the price elasticity of demand on the following demand curve?
Straight line parallel to X-axis.
What is the price elasticity of demand on the following demand curve?
Straight line parallel to Y-axis.
What is the price elasticity of demand on the following demand curve?
On the mid-point of the straight line moving from left to right.
Discuss any four factors affecting price elasticity of demand.
State the types of income elasticity of demand.
Give the formula to measure income elasticity of demand.
What will be the income elasticity of demand in case of normal goods?
What will be the income elasticity of demand in case of inferior goods?
What is meant by cross elasticity of demand?
What does cross elasticity of demand between two goods imply? Give an example to explain.
Give the formula to measure cross elasticity of demand.
State the degrees of cross elasticity of demand.
If commodity X and the commodity Y are complementary goods, what will be the cross elasticity of demand?
If commodity X and the commodity Y are substitute goods, what will be the cross elasticity of demand?
If the cross elasticity of demand goods and X is negative, state how the goods are related to each other.
If the cross elasticity of demand between two goods is positive, state how the two goods are related to each other.
Explain the importance of elasticity of demand.
Short Answer Questions
Define price elasticity of demand.
How is price elasticity of demand measured?
Define price elasticity of demand.
How is price elasticity of demand measured?
How is price elasticity of demand measured?
Explain the Total expenditure method and Geometric method of measuring price elasticity of demand.
Explain the Total expenditure method and Geometric method of measuring price elasticity of demand.
Draw demand curves showing elasticity equal to zero.
Draw a perfectly elastic demand curve.
Draw the demand curve showing unitary elastic demand all through.
Draw a diagram to show the elasticity of demand when it is greater than one.
Draw a diagram to show the elasticity of demand when it is less than one.
Draw the demand curve showing unitary elastic demand all through.
Draw a downward sloping straight line demand curve touching both the axes. Mark the price elasticity at different points on this demand curve.
What will be the elasticity of demand in the following situation?
When the change in price and the total expenditure move in the opposite directions.
What will be the elasticity of demand in the following situation?
When the change in price and total expenditure move in the same direction.
What will be the elasticity of demand in the following situation?
When total expenditure remains the same in spite of a change in price.
Draw the demand curve showing unitary elastic demand all through.
Draw a demand curve which has unit elasticity only at one point.
Explain the importance of elasticity of demand.
Explain the importance of elasticity of demand.
Define income elasticity of demand.
State the types of income elasticity of demand.
OR
What is meant by income elasticity of demand?
When can the income elasticity of demand be negative?
What is meant by cross elasticity of demand?
State the degrees of cross elasticity of demand.
Long Answer Questions
What is meant by price elasticity of demand?
Explain any three types of price elasticity of demand with the help of diagrams.
Discuss any four factors affecting price elasticity of demand.
How is the elasticity of demand of a commodity affected by the existence of substitutes of a commodity?
How is the elasticity of demand of a commodity affected by the Nature of a commodity?
How is the elasticity of demand of a commodity affected by the amount of income spent on a commodity?
Define price elasticity of demand.
Explain the importance of elasticity of demand.
How can you determine the price elasticity of demand at any point on a non-linear demand curve? Explain it with the help of a diagram.
Distinguish between price elasticity, cross elasticity and income elasticity of demand.
What is meant by price elasticity of demand?
Explain the importance of elasticity of demand.
Thinking Beyond
Compare the price elasticity of two straight line demand curves intersecting each other at the point of intersection.
As explained in the text, if the two points on the demand curve are quite apart from each other, i.e., when changes in price and quantity are large, the percentage method of calculating price elasticity of demand on a non-linear demand curve will give different values depending on the direction of change in price and quantity. How can we give the correct measure of price elasticity of demand in such a situation?
Frank solutions for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी 4 Elasticity of Demand NUMERICAL QUESTIONS [Page 80]
The price of a commodity falls from ₹ 50 to ₹ 30, resulting in an increase in the purchase of the commodity from 200 units to 220 units. Calculate the price elasticity of demand.
A consumer buys 50 units of a good at ₹ 4 per unit. If its price falls by 25 percent, its demand rises to 100 units. Calculate its price elasticity of demand.
At a price of ₹ 4 per unit a consumer buys 50 units of a good. The price elasticity of demand is (−) 2. How many units will the consumer buy at a price of ₹ 3 per unit?
The quantity demand of a commodity at price ₹ 8 per unit is 600 units. Its price falls by 25% and quantity demanded rises by 120 units. Calculate price elasticity of demand. Is its demand elastic?
Calculate the quantity demanded of a commodity when the price increases from ₹ 4 to ₹ 6. The original quantity demanded was 40 units and the price elasticity of demand is 0.5.
The price elasticity of demand of a good is 0.5. The consumer buys 50 units of the good at a price of ₹ 10 per unit. At what price will the consumer by willing to buy 60 units?
The quantity demanded of a commodity at a price of ₹ 10 per unit is 40 units. Its price elasticity of demand is −2. The price falls by 2 per unit. Calculate the quantity demanded at the new price.
A consumer buys 40 units of a good at a price of ₹ 3 per unit. When price rises to ₹ 4 per unit, he buys 30 units. Calculate eP by the expenditure method.
When price of a good rises from ₹ 5 per unit to ₹ 6 per unit, its demand falls from 20 units to 10 units. Use the Expenditure Method of measuring price elasticity of demand to determine whether demand is elastic or inelastic.
If demand increased by 50 percent due to an increase in income by 75 percent, calculate the income elasticity of demand.
The demand for a commodity at ₹ 4 per unit is 100 units. The price of the commodity rises and, as a result, the demand falls to 75 units. Find the new price of the price elasticity of demand of the commodity is 1.
When price of commodity X changes from ₹ 40 per unit to ₹ 20 per unit, its demand increases by 20 units. If price elasticity of demand is 0.5, calculate the initial and final quantity demanded of commodity X.
When the price of potato chips falls from ₹ 40 to ₹ 20 per unit, its demand increases by 20 units. If the price elasticity of demand is (−) 0·5, calculate the quantity demanded of potato chips at ₹ 20.
Solutions for 4: Elasticity of Demand
Frank solutions for इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी chapter 4 - Elasticity of Demand
Shaalaa.com has the CISCE Mathematics इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी CISCE solutions in a manner that help students grasp basic concepts better and faster. The detailed, step-by-step solutions will help you understand the concepts better and clarify any confusion. Frank solutions for Mathematics इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी CISCE 4 (Elasticity of Demand) include all questions with answers and detailed explanations. This will clear students' doubts about questions and improve their application skills while preparing for board exams.
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Concepts covered in इकॉनॉमिक्स [अंग्रेजी] कक्षा १२ आईएससी chapter 4 Elasticity of Demand are Introduction to Elasticity of Demand, Price Elasticity of Demand, Factors Affecting Price Elasticity of Demand, Importance of Elasticity of Demand, Income Elasticity of Demand, Cross Elasticity of Demand, Numerical Problems of Price Elasticity of Demand, Methods of Measuring Price Elasticity of Demand, Percentage or Proportionate Method, Total Expenditure Method, Point Method (Geometric Method), Arc Elasticity of Demand, Revenue Method, Meaning and Types of Elasticity of Demand, Classification of Price Elasticity - Degrees of Price Elasticity of Demand, Types of Income Elasticity of Demand, Importance of Income Elasticity, Туpes of Cross Elasticity of Demand, Limitations of Cross Elasticity of Demand, Importance of Cross Elasticity of Demand.
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