IGCSE Economics Quiz

Which statement about price elasticity of demand (PED)is correct?

• A PED measures the percentage change in quantity demanded divided by the percentage change in price.

• B PED measures the change in price divided by the change in the quantity demanded.

• C PED means a change in price will cause an equal change in the quantity demanded.

• D PED means a change in demand will result in a greater percentage change in price.

In the diagram, which demand curve has elastic demand?

• A

• B

• C

• D

In recent years, the demand for cars in Indonesia has become more price inelastic while the suppy of cars has become more price elastic.

Which combination of events could have caused these changes?

• A

• B

• C

• D

In response to an increase in price from $5 per kilo to $6 per kilo a chicken farmer increasedsupply from 400 kilos to 500 kilos per week.

What is the price elasticity of supply?

• A 0.8

• B 0.9

• C 1.2

• D 1.25

How might the concept of price elasticity of demand (PED)be useful for a government?

• A to determine the effect on employment of a change in income tax

• B to determine the effect on government revenue of a rise in the rate of interest

• C to determine the effect of providing a public good

• D to determine the result of imposing a tariff on imports

A railway company increases ticket prices by 10%for travel between 06:00 and 09:00,causing areduction in demand by 2%.After 09:00 it reduces ticket prices by 5%,resulting in a 7% increase in demand.

What is the price elasticity of demand in response to these price changes?

• A

• B

• C

• D

n recent years,the demand for cars in Indonesia has become more price inelastic while thesupply of cars has become more price elastic.

Which combination of events could have caused these changes?

quality of public transport time taken to produce a car

• A

• B

• C

• D

A product has a price elasticity of supply of+2. A change in price causes the quantity supplied to change from 100 units to 120 units.

What is the price change?

• A a fall of 10%

• B a fall of 40%

• C a rise of 10%

• D a rise of 40%

The formula for a good's price elasticity of supply needs to be completed. price elasticity of supply=X/Y

What needs to replace X and Y to complete the formula?

• A

• B

• C

• D

The price elasticity of supply of good X is 0.1.The good suddenly becomes very fashionable,leading to a large increase in demand.

What would be the likely outcome of this change in the short term?

• A a large increase in output

• B a large increase in price

• C a small increase in price

• D a small increase in revenue