Elasticity Test

An 20% increase in the price of a product leads to a 40% decrease in quantity demanded. What is the price elasticity of demand?

• 2

• 0.5

• -2

• 1

A person's income rises by 10%, their demand for Big Macs drops by 5%. Calculate Income elasticity of Demand.

• 0.5

• -0.5

• 2

• -2

The price of Pepsi rises by 10%, the demand for Coke rises by 10% too.

• Ped = 1

• Ped = -1

• Xed = 1

• Xed = -1

The price of a good is $10, with a quantity demanded of 100 units. The price drops to $8 and the quantity demanded rises to 150 units. What is the PED?

• 0.4

• -0.4

• 2.5

• -2.5

Price elasticity of demand = -0.5

• Inelastic demand

• Elastic demand

• Unitary demand

• Perfectly Inelastic demand

Income elasticity of demand = -0.4

• Normal Good

• Inferior Good

• Complementary Good

• Substitute Good

Cross elasticity of demand = 0.4

• Normal Good

• Inferior Good

• Complementary Good

• Substitute Good

Cross elasticity of demand = 1.4

• Normal Good

• Inferior Good

• Complementary Good

• Substitute Good

Income elasticity of demand = 1.4

• Normal Good

• Inferior Good

• Complementary Good

• Substitute Good

Cross elasticity of demand = -1.4

• Normal Good

• Inferior Good

• Complementary Good

• Substitute Good