The price elasticity of demand measures:

the responsiveness of quantity demanded to a change in price

An excise tax imposed on sales of petrol or tobacco is likely to:

raise considerable government revenue.

Supply of nectarines may be inelastic in the short term because:

all of the others are possible.

Why is ELASTICITY important?

For the government to intervene on prices, To determine how consumers will react to price changes., For suppliers to set their pricing strategy

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EconU3 AoS 1 - Price Elasticity

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#elasticity VCE Economics Microeconomics price elasticity of demand supply

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Questions 14

Answers

1
Demand elasticity is equal to 1.
Unit Elastic
Perfectly Elastic
Elastic
Inelastic
2
The price elasticity of demand measures:
a change in price
a change in quantity demanded
how far a demand curve shifts
the responsiveness of quantity demanded to a change in price
3
Demand IS responsive to a change in price.
Perfectly Inelastic
Inelastic
Elastic
Unitary
4
If the price of coffee rises by 10% and the demand for coffee contracts by 5%:
PED is unit elastic
PED is elastic
PED is inelastic
PED cannot be calculated
5
What kind of elasticity is this?
Unit Elastic Demand
Elastic demand
Inelastic demand
Perfectly Inelastic Demand
6
A measure of how consumers react to a change in price.
Elasticity of Demand
Law of Demand
Elasticity of Supply
Law of Supply
7
What kind of elasticity is this?
Perfectly elastic demand
Elastic demand
Inelastic demand
Perfect inelastic demand
8
Currently, the demand for petrol is described as:
unit elasticity.
this cannot be determined.
relatively elastic.
relatively inelastic.
9
If demand is ___________ then price cuts will __________ spending
inelastic, increase
elastic, increase
none of the above
elastic, decrease
10
Which of the following products is most likely to face an elastic demand?
Pepper
Margarine
Water
Electricity
11
An excise tax imposed on sales of petrol or tobacco is likely to:
reduce problems associated with the use of these products
greatly change consumer behaviour and reduce consumption.
raise considerable government revenue.
have no effect at all on resource allocation.
12
Supply of nectarines may be inelastic in the short term because:
all of the others are possible.
the resources of fruit growers are immobile.
time is needed to grow extra trees.
the fruit has a limited storage life.
13
Demand IS NOT responsive to change in price.
Unitary
Elastic
Inelastic
Perfectly Elastic
14
Why is ELASTICITY important?
For the government to intervene on prices
To determine how consumers will react to price changes.
For suppliers to set their pricing strategy
Chocolate

EconU3 AoS 1 - Price Elasticity Flashcards | StudBud