Elasticity in Economics Worksheet

What does the concept of elasticity in economics measure?

• The speed at which products are produced

• How quantity demanded or supplied responds to a change in price

• The popularity of a product

• The total revenue earned by a company

If a 10% increase in the price of luxury clothing results in a 20% decrease in quantity demanded, the demand is:

• Inelastic

• Perfectly inelastic

• Elastic

• Unitary elastic

A 10% increase in the price of petrol causes only a 3% drop in demand. This is an example of:

• Elastic demand

• Unitary elastic demand

• Perfectly elastic demand

• Inelastic demand

If the percentage change in price equals the percentage change in quantity demanded, the demand is:

• Inelastic

• Elastic

• Unitary elastic

• Perfectly inelastic

Which of the following products is most likely to have elastic demand?

• Tap water

• Cigarettes

• Luxury holidays

• Insulin

Which of these is an example of unitary elastic demand?

• Designer clothes

• Standard mobile data plans

• Petrol

• Insulin

Which product is most likely to have inelastic demand?

• Store-brand cereal

• Movie tickets

• Cigarettes

• Designer handbags

Which determinant of price elasticity of demand is related to how essential a product is to the consumer?

• Time horizon

• Necessity vs. Luxury

• Income elasticity

• Cross-price elasticity

If a product has many close substitutes, its demand is likely to be:

• Inelastic

• Unitary

• Elastic

• None of the above

If a product makes up a large proportion of a consumer's income, the demand is likely to be:

• Inelastic

• Elastic

• Perfectly elastic

• Unitary