Part A: Multiple choice, mark your answer for each question.

7. The concept of elastic elasticity refers to:

a) changes in quantity are greater than changes in price

b) changes in quantity are less than changes in price

c) changes in demand are greater than changes in supply

d) changes in demand are less than changes in supply

8. The determinants of the price elasticity of demand

a) fixed and variable costs of production

b) supply and demand for basic necessities in the markets

c) substitute products, time and proportion of related spending on consumer

d) tastes and preferences, government taxes, changes in production volume