WorksheetsA closer look at demand & supply
Total questions: 15
Worksheet time: 4hrs 45mins
What is the definition of PED?
a measure of how quantity demanded of a product changes when there is a change in the income of the consumer
a measure of how quantity demanded of a product changes when there is a change in the price of the product
a measure of how quantity supplied of a product changes when there is a change in the price of the product
a measure of how demand of a product changes when there is a change in the price of the product
What is the formula for PES?
percentage change in quantity supplied/percentage change in demand of the product
change in quantity supplied/ change in price of the product
percentage change in quantity demanded/percentage change in price of the product
percentage change in quantity supplied/percentage change in price of the product
What is the range of values for inelastic supply?
0<PES<1
1<PES<∞
PES = 1
What is the range of values for elastic supply?
0<PES<1
PES = 1
1<PES<∞
Which of these are the determinants of PES?
time period considered
increase in costs vs increase in output
expectations about future prices
ability to stock store
necessity of the product
The (a) the time period considered, the more elastic the supply will be.
If costs rise significantly, compared to the amount of output increased, the the supplier (a) be willing to increase supply.
Primary goods ...
have a rather inelastic supply, in opposition to manufactured goods
have a rather elastic, in opposition to manufactured goods
have a rather elastic, similarly to manufactured goods
have a rather inelastic, similarly to manufactured goods
Which of these are determinants of PED?
number and closeness of substitutes
necessity of the product
how much costs rise as output is increased
the ability to store stock
time period considered
What is the range of values for elastic demand?
PED = 1
PED = 0
1<PED<∞
0<PED<1
If the price for an inelastic good is raised, the quantity will not fall by much in proportion, therefore the total revenue gained by the firm will (a)
What is the formula for YED?
% change in quantity demanded / % change in income of the consumer
% change in quantity demanded / % change in the price of the product
% change in income of the consumer / % change in quantity demanded
% change in quantity supplied / % change in income of the consumer
The value of YED is negative for
inferior goods
necessity goods
luxury goods
Manufactured goods have elastic demand
True
False
What is the range of values for unit elastic demand?
PED = 0
PED = 1
1<PED<∞
0<PES<1
