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WorksheetsPrice Elasticities
Total questions: 12
Worksheet time: 9mins
Name
Class
Date
1.
What is demand elasticity?
a)
Demand that is very sensitive to a change in price.
b)
Demand that is not very sensitive to a change in price.
c)
A measure of how consumers react to a change in price.
d)
An economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service.
2.
The formula for calculating elasticity of demand is:
a)
(% change in price)/ (% change in Qd)
b)
(% change in Qd) / (% change in price)
c)
(change in price)/(change in Qd)
d)
( Qd) / ( price)
3.
Consuming more of one good because of a change in price of another good is known as the
a)
income effect
b)
substitution effect
c)
elasticity effect
d)
demand effect
4.
The market equilibrium price is the price at which
a)
surpluses depress the number of goods supplied
b)
shortages and surpluses will have no effect on the market
c)
the government will not intervene in the market
d)
the quantity demanded is the same as the quantity supplied
5.
A product or service with an PED less than (-)1 is demand:
a)
Inelastic
b)
Elastic
c)
Unit Elastic
d)
This is not possible
6.
A product or service with an PED greater than (-)1 is demand:
a)
Elastic
b)
Inelastic
c)
Unit Elastic
d)
This is not possible
7.
Define inelastic demand.
a)
A measure of how consumers react to a change in price
b)
Demand that is not very sensitive to a change in price
c)
Demand that is very sensitive to a change in price
d)
A measure of the way quantity supplied reacts to a change in price
8.
Product A has a PED of (-) 4. If price falls from $20 to $19, calculate the % change in Qd
a)
20
b)
1/20
c)
40
d)
5
9.
Product A has a PED of (-4). Price falls from $20 to $19. Qd rises from 100 units to:
a)
104 units
b)
140 units
c)
120 units
d)
96 units
10.
Product A has a PED of (-)4. Price and Quantity change from $20, 200 units to $19, 120 units. The change in revenue is:
a)
$2000
b)
$2280
c)
$200
d)
$280
11.
Product B has price $50 and Qd is $20. The price rises to $55 and Qd falls to 10. Calculate the PED
a)
(-)5
b)
(-)10
c)
(-) 0.5
d)
(1)0.3
12.
Product C has a PED of (-)0.6. After price falls from $30 to $25 the new Qd is 88 units. Calculate the original Qd
a)
84.4
b)
83
c)
86
d)
80
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