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WorksheetsUnderstanding Elasticity of Demand
Total questions: 10
Worksheet time: 5mins
1. What does the price elasticity of demand measure?
The responsiveness of quantity demanded to price changes.
The relationship between supply and demand.
The effect of income on quantity demanded.
The total revenue generated from sales.
2. If the price of a good increases and the quantity demanded decreases significantly, the demand is said to be:
unitary demand
elastic demand
perfectly inelastic demand
inelastic demand
3. Which of the following is an example of elastic demand?
Public transportation tickets
Designer handbags
Basic t-shirts
Grocery items
4. What is the formula for calculating price elasticity of demand?
Price Elasticity of Demand = (Price Change) / (Quantity Change)
Price Elasticity of Demand = (Quantity Demanded) / (Price)
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Demand = (Total Revenue Change) / (Price Change)
5. If the price elasticity of demand is less than 1, the demand is considered:
unitary elastic
elastic
perfectly elastic
inelastic
6. Which factor does NOT affect the elasticity of demand?
The income level of consumers
The price of the product
The specific brand of the product
The availability of substitutes
7. What type of goods typically have inelastic demand?
Necessities and essential goods
Perishable food items
Luxury items and non-essential goods
Seasonal products
8. If a 10% increase in price leads to a 5% decrease in quantity demanded, what is the price elasticity of demand?
-0.5
0.5
0.2
1.0
9. Cross-price elasticity of demand measures the responsiveness of demand for one good to changes in the price of:
A complementary good
Another good
A substitute good
The same good
10. Which of the following statements is true about perfectly inelastic demand?
The quantity demanded increases as price decreases.
The quantity demanded is affected by consumer preferences.
The quantity demanded varies with changes in income.
The quantity demanded remains constant regardless of price changes.
