KASNEB CPA Foundation Level (Kenya) · Economics

Demand, supply and elasticity

12 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 12 questions

  1. According to the law of demand, when the price of a good rises, the quantity demanded
  2. Which of the following would shift the demand curve for tea to the right?
  3. A rise in the price of coffee leads to an increase in the demand for tea. Tea and coffee are
  4. When the price of a good rises from KSh 20 to KSh 25 and the quantity demanded falls from 100 to 80, what is the price elasticity of demand (using percentage changes from the original values)?
  5. A product has price elasticity of demand of -2.5. If the firm raises its price, total revenue will
  6. The demand for salt is likely to be
  7. At a price of KSh 50 the quantity supplied is 200 units; at KSh 60 it is 260 units. What is the price elasticity of supply?
  8. The equilibrium price in a market is the price at which
  9. The demand function is Qd = 100 - 2P and the supply function is Qs = 20 + 2P. What is the equilibrium price?
  10. A government sets a maximum price below the equilibrium price. The likely result is
  11. A subsidy to producers will
  12. Consumer surplus is

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