2.3 Elasticity of Demand

Multiple Choice

What does the price elasticity of demand measure?

• The responsiveness of quantity demanded to a change in price

• The responsiveness of quantity supplied to a change in price

• The responsiveness of demand to a change in consumer income

• The responsiveness of supply to a change in consumer income

Multiple Choice

What is the definition of INelastic Demand?

• Quantity is sensitive to a change in price

• Quantity is insensitive to a change in price

• Quantity demanded increases with price

• Quantity demanded decreases with price

Multiple Choice

What are the general characteristics of inelastic goods?

• Few substitutes

• Luxury items

• High portion of income

• Optional goods

Multiple Choice

Which of the following two goods is more likely to be inelastically demanded?

• Demand for insulin

• Demand for vitamins

Multiple Select

Why does elasticity matter?

• It helps them decide what to charge and when, if ever, to have sales

• It helps them determine how many substitutes are in the market

• It is also used by the government to decide when and how much to tax

• None of the above

Poll

How confident do you feel about this topic now?

• Very confident
• Somewhat confident
• Not confident