WorksheetsElasticity: IB Marshall Econ
Total questions: 18
Worksheet time: 6mins
What is the equation for calculating PED?
%ΔQs/%ΔP
%ΔP/%ΔQd
%ΔP/%ΔQs
%ΔQd/%ΔP
What are the coefficients of PED?
PED>1: Elastic
PED<0: Inelastic
PED=1: Unit Elastic
PED<1: Elastic
0<PED<1: Inelastic
PED=1: Unit Elastic
PED>1: Elastic
0<PED<1: Inelastic
PED=1: Unit Elastic
What's PED?
The demand for IB Economics textbooks is price inelastic. Which of the following would explain this?
There are many different textbooks which can be substituted for economic textbooks
IB Economics textbooks are a necessity for high school students taking the course
Students have a lot of time to shop around for a better price for economic textbooks
Textbooks are a luxury good for high school students
When the price of hamster wheels increases, the total revenue for companies that make hamster wheels decreases. At the current price, hamster wheels are
Price inelastic
Unit elastic
Price elastic
Income elastic
Mr. Krabs, supplier of Krabby Patties, is traumatized after hearing about an upcoming recession hitting the town of Bikini Bottom. This was to due to the realization that
A recession would cause an increase in the price of Krabby Patties
Residents will have more money to spend on luxury restaurants not the Krusty Krab
Decrease in income for the consumers in Bikini Bottom means an increase in demand for inferior goods from the Chum Bucket
Decrease in income for the consumers in Bikini Bottom means an increase in demand for normal goods, such as Krabby Patties
What is the equation for calculating XED?
%ΔQd/%ΔQs
%Δ(Qd)a/%ΔPb
%Δ(Qd)a/%ΔPa
%Δ(Qd)a/%Δ(Qd)b
Which of the following diagrams represents the relationship between two complementary goods?
Graph 1
Graph 2
Graph 3
What are the coefficients of XED?
XED>1: Elastic/Substitutes
XED<0: Inelastic/Not Related
XED>1: Elastic/Compliments
0<XED<1: Inelastic/Not Related
XED<0: Elastic/ Substitutes
XED>1: Inelastic/Not Related
0<XED<1: Elastic/Substitutes
XED<0: Elastic: Compliments
XED>1: Elastic/Substitutes
0<XED<1: Inelastic/Not Related
XED<0: Elastic/Compliments
Which of the following diagrams accurately represents PED?
Graph 1
Graph 2
Graph3
A tax on which of the following would generate the most revenue?
Yachts
Poultry
Coffee
Beach Rentals
What is the equation for calculating YED?
%ΔQd/%ΔQs
%Δ(Qd)a/%ΔPb
%ΔQd/%ΔY
%ΔY/%ΔQd
What are the coefficients of YED?
YED>1: Elastic/Normal Good
0<YED<1: Inelastic
YED<0: Elastic/Luxury Good
YED>4: Elastic/Luxury Good
1<YED<4: Elastic/Normal Good
0<YED<1: Inelastic
YED<0: Elastic/Inferior Good
YED>4: Elastic/Luxury Good
1<YED<4: Elastic/Normal Good
0<YED<1: Elastic/Inferior Good
YED<0: Inelastic
YED>4: Elastic/Normal Good
1<YED<4: Elastic/Luxury Good
0<YED<1: Inelastic
YED<0: Elastic/Inferior Good
A bike rental firm just heard of an up-coming expansionary period. What should the firm do?
The firm should keep renting bikes
The firm should switch over to supplying bus tickets
The firm should switch to car rentals
The firm should shut down
What is PES and what is the equation for calculating it?
PES measures the responsiveness of consumers to a change in the price of a good= %ΔQs/%ΔP
PES measures the responsiveness of producers to a change in the price of a good= %ΔQd/%ΔP
PES measures the responsiveness of producers to a change in the price of a good= %ΔQs/%ΔP
PES doesn't measure anything!
A florist is able to increase the supply of cut flowers quickly in the summer months, but more slowly in the winter months. This implies that
PES is inelastic in the summer months and elastic in the winter months
PED is elastic in the winter months and inelastic in the summer months
PES is elastic in the summer months and inelastic in the winter months
PED is inelastic in the winter months and elastic in the winter months
Which of the following are determinants of the price elasticity of supply?
The ability of producers to hold stocks
The time period being considered
Changes in consumer perception of utility
The ease in which factors can be substituted
Changes in consumer incomes
The Ghanaian government decides to place an excise tax on a car-producing firm with 20 excess workers. The burden of the tax will mostly fall on
Producers
Consumers
The Ghanaian government
The excess workers
You're the #1 supplier of toothpicks AND beach rentals in the US. Yeah, you've pretty much got it all! You've decided to increase your profit and are faced with a tough decision: Whether you should increase the price of toothpicks or beach rentals. Which will it be?
Toothpicks, because they make up a smaller proportion of a consumer's income and are, therefore, price inelastic
Beach rentals, because they make up a greater proportion of a consumer's income are, therefore, price inelastic
Toothpicks, because they make up a smaller proportion of a consumer's income and are, therefore, price elastic
Beach rentals, because they make up a greater proportion of a consumer's income, and are, therefore, price elastic
