PED and XED QUIZ

“Sensitivity of your "consumption" in response to change in price” is the definition of what term?

• XED

• PED

• PPC

• Scarcity

Which one of these is not a factor affecting a product’s PED?

• Number and closeness of substitutes

• Degree of necessity

• Proportion of income spent on the good

• Technology

A measure of the responsiveness of demand for one good to a change in price of another good” is the definition of what term?

• YED

• PED

• PES

• XED

If a good has a positive value of XED then it’s a…

• Complementary good

• Demerit good

• Substitute good

• Merit good

What should be the numerator and denominator, respectively?

• Change in quantity demanded, Change in income

• Change in Price, Change in quantity demanded

• Change in quantity demanded, Change in price

• Change in Price, Change in quantity demanded for good x

To increase the total revenue of a demerit good, what should be done firstly?

• Adding subsidies

• Lower the price floor and decrease the tax

• Increase the price floor and increase the tax

• Decreasing the supply

If the XED is a high negative value, that means the two goods…

• Close substitute

• Remote substitute

• Close complements

• Remote complements

If the PED of a good equals to infinity then the demand is?

• Elastic

• Inelastic

• Perfectly elastic

• Perfectly inelastic

If a good is part of a culture, then it’s most-likely...

• Elastic

• Inelastic

• Perfectly elastic

• Perfectly inelastic

What is the importance for government to have knowledge about PED?

• To study the ways in which resources are allocated to meet needs and wants

• To decide for whom to produce

• To control/influence consumption behaviour or the pattern of purchasing by consumers

• To avoid negative externalities