IGCSE Economics – Price Elasticity of Demand & Supply Quiz

What does price elasticity of demand (PED) measure?

• The responsiveness of demand to income changes

• The responsiveness of demand to price changes

• The responsiveness of supply to price changes

• The effect of advertising on demand

If PED is greater than 1, demand is:

• Inelastic

• Perfectly elastic

• Unitary

• Elastic

When the percentage change in price equals the percentage change in quantity demanded, PED is:

• Unitary

• Elastic

• Perfectly inelastic

• Perfectly elastic

Which of the following will make demand more price elastic?

• Few substitutes

• Addictive nature of the good

• Short time period

• Many substitutes available

If PED = 0, this means:

• Demand is perfectly elastic

• Demand is unit elastic

• Demand is perfectly inelastic

• Demand is elastic

Which type of good is most likely to have inelastic demand?

• Luxury goods

• Non-essential goods

• Goods with many substitutes

• Necessities

A business is likely to raise price if demand is:

• Elastic

• Unitary

• Inelastic

• Perfectly elastic

If a good has PED = ∞, demand is:

• Inelastic

• Elastic

• Unitary

• Perfectly elastic

Which of the following can influence price elasticity of demand?

• Number of suppliers

• Production time

• Availability of substitutes

• Production cost

What does price elasticity of supply (PES) measure?

• The responsiveness of supply to a change in demand

• The responsiveness of supply to a change in price

• The responsiveness of demand to income changes

• The quantity supplied at one price