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Elasticity
Elasticity
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Revision of all elasticities
Flashcards
15 cards
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Practice quiz
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Host live
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Questions
15
Answers
1
A product decreases in price by 5%, and demand then rises by 4%. The PED is
-1.25
0.8
1.25
-0.8
2
If the price of a product rise by 30%, and demand falls by 10%, PED is
-3
-0.33
-1.33
-30
3
Prices of coffee fell , and demand is inelastic. A fall in price will cause
Rise in revenue
No change in revenue
Fall in revenue
Increase in profitability
4
The price of pasta increases by 30%, and demand for red wine decreases by 3%, we know that...
They are close complements
They are weak complements
They are weak substitutes
They are close substitutes
5
If PED is for a product is 0.6, The demand is
Elastic
Perfectly inelastic
Inelastic
Perfectly elastic
6
The price of Toyota cars falls by 8%, and demand for Nissan cars falls by 2%, the XED is
-0.25
+2
+0.25
+0.5
7
A normal good can be distinguished from an inferior good because a normal good has...
negative YED
positive XED
positive YED
positive PED
8
If PES for coal is +0.6, an increase in price from £30 to £33 will increase supply from 400,000
to 422,000
430,000
to 424,000
to 420,000
9
If XED for two products is negative, they are
Inferior goods
Substitutes
Normal goods
Complements
10
Which of the following is correct?
PES is normally negative
PES is higher when stock levels are high
PES is higher when all resources are used fully
PES is lower the longer the time period
11
When PED is elastic, more of a tax on the product will be borne by producers.
False
True
12
Which of the following would you expect to increase demand for foreign holidays?
Fall in consumer confidence
Fall in value of the exchange rate
Rise in income
Rise in interest rates
13
A vertical demand curve can be described as perfectly elastic.
True
False
14
The price of chocolate increases from 50p to 60p, but demand stays exactly the same. PED is
Perfectly Elastic
Elastic
Perfectly Inelastic
Unitary
15
The PED is greater for goods that have several rather than fewer close substitutes.
False
True
