Elasticity: IB Marshall Econ

What is the equation for calculating PED?

• %ΔQs/%ΔP

• %ΔP/%ΔQd

• %ΔP/%ΔQs

• %ΔQd/%ΔP

What are the coefficients of PED?

• PED>1: Elastic

  PED<0: Inelastic

  PED=1: Unit Elastic

• PED<1: Elastic

  0<PED<1: Inelastic

  PED=1: Unit Elastic

• PED>1: Elastic

  0<PED<1: Inelastic

  PED=1: Unit Elastic

• What's PED?

The demand for IB Economics textbooks is price inelastic. Which of the following would explain this?

• There are many different textbooks which can be substituted for economic textbooks

• IB Economics textbooks are a necessity for high school students taking the course

• Students have a lot of time to shop around for a better price for economic textbooks

• Textbooks are a luxury good for high school students

When the price of hamster wheels increases, the total revenue for companies that make hamster wheels decreases. At the current price, hamster wheels are

• Price inelastic

• Unit elastic

• Price elastic

• Income elastic

Mr. Krabs, supplier of Krabby Patties, is traumatized after hearing about an upcoming recession hitting the town of Bikini Bottom. This was to due to the realization that

• A recession would cause an increase in the price of Krabby Patties

• Residents will have more money to spend on luxury restaurants not the Krusty Krab

• Decrease in income for the consumers in Bikini Bottom means an increase in demand for inferior goods from the Chum Bucket

• Decrease in income for the consumers in Bikini Bottom means an increase in demand for normal goods, such as Krabby Patties

What is the equation for calculating XED?

• %ΔQd/%ΔQs

• %Δ(Qd)a/%ΔPb

• %Δ(Qd)a/%ΔPa

• %Δ(Qd)a/%Δ(Qd)b

Which of the following diagrams represents the relationship between two complementary goods?

• Graph 1

• Graph 2

• Graph 3

• 

What are the coefficients of XED?

• XED>1: Elastic/Substitutes

  XED<0: Inelastic/Not Related

• XED>1: Elastic/Compliments

  0<XED<1: Inelastic/Not Related

  XED<0: Elastic/ Substitutes

• XED>1: Inelastic/Not Related

  0<XED<1: Elastic/Substitutes

  XED<0: Elastic: Compliments

• XED>1: Elastic/Substitutes

  0<XED<1: Inelastic/Not Related

  XED<0: Elastic/Compliments

Which of the following diagrams accurately represents PED?

• Graph 1

• Graph 2

• Graph3

A tax on which of the following would generate the most revenue?

• Yachts

• Poultry

• Coffee

• Beach Rentals