Rearranging Elasticity Formulas and the Elasticity Triangle

The video tutorial explains how to rearrange elasticity formulas, focusing on price elasticity of demand. It provides examples of calculating elasticity and demonstrates how to rearrange formulas to solve different problems. The concept of the elasticity triangle is introduced, showing how it can be used to calculate various elasticities, including price elasticity of supply, income elasticity of demand, and cross elasticity of demand.

What is the standard formula for price elasticity of demand?

• Proportionate change in quantity demanded divided by price

• Proportionate change in quantity demanded divided by proportionate change in price

• Proportionate change in price divided by proportionate change in quantity demanded

• Proportionate change in price divided by quantity demanded

If the quantity demanded increases by 20% and the price decreases by 40%, what is the price elasticity of demand?

• -0.5

• 0.5

• 2

• -2

How can you rearrange the price elasticity of demand formula to solve for the proportionate change in quantity demanded?

• Subtract the proportionate change in price from both sides

• Add the proportionate change in price to both sides

• Multiply both sides by the proportionate change in price

• Divide both sides by the proportionate change in price

In the elasticity triangle, what does covering up the price elasticity of demand help you calculate?

• Price elasticity of supply

• Proportionate change in quantity demanded

• Cross elasticity of demand

• Proportionate change in price

What is the proportionate change in price if the demand increases by 24% and the price elasticity of demand is -3?

• -8%

• 8%

• 0.8%

• -0.8%

Which of the following is NOT a type of elasticity that can be represented using the elasticity triangle?

• Income elasticity of demand

• Elasticity of substitution

• Price elasticity of demand

• Cross elasticity of demand

What is the formula for price elasticity of supply?

• Proportionate change in quantity supplied divided by proportionate change in income

• Proportionate change in price divided by proportionate change in quantity supplied

• Proportionate change in income divided by proportionate change in quantity supplied

• Proportionate change in quantity supplied divided by proportionate change in price

How is the elasticity triangle useful in solving elasticity problems?

• It simplifies the calculation of elasticity by providing a visual representation

• It is only useful for supply-related problems

• It eliminates the need for any calculations

• It only applies to price elasticity of demand

What is the cross elasticity of demand formula?

• Proportionate change in quantity demanded of good A divided by proportionate change in price of good B

• Proportionate change in price of good B divided by proportionate change in quantity demanded of good A

• Proportionate change in price of good A divided by proportionate change in quantity demanded of good B

• Proportionate change in quantity demanded of good B divided by proportionate change in price of good A

What is the main benefit of understanding elasticity triangles?

• They are only useful for theoretical discussions

• They provide historical context to economic concepts

• They assist in solving complex elasticity questions during exams

• They help in memorizing economic theories