Price Elasticity Quiz 1

In response to an increase in price from $5 per kilo to $6 per kilo, a farmer increased supply from 400 kilos to 500 kilos per week. What is the price elasticity of supply?

• 0.8

• 0.9

• 1.2

• 1.25

Lithium is an essential metal for the production of electric cars. Following a 10% increase in the price of lithium, supplies increase by 15%. This led to a 5% increase in the price of electric cars. What is the price elasticity of supply (PES) for lithium?

• 0.33

• 0.66

• 1.50

• 2.0

The price of bread rose by 5% and the quantity demanded fell by 4%. What was the price elasticity of demand for bread?

• -0.4

• -0.8

• -1.25

• -2.0

The table shows the demand schedule for a good at different prices. The current market price for the good is $10. Following a 20% increase in price what will be the change in quantity demanded?

• -60

• -40

• +120

• +200

A mobile (cell) phone operator increases the price of making calls on its network. After the price increase, the revenue of the mobile phone operator falls by 10%. What is the price elasticity of demand (PED) for the mobile operator's service?

• elastic

• inelastic

• perfectly elastic

• unit elastic