eleanor.adamandi
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Select the correct answer to these questions challenging your knowledge of price elasticity of demand

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Price Elasticity of Demand

Question 1 of 8

1

What does PED measure?

Select one of the following:

  • The responsiveness of the quantity demanded of a good to a change in its price

  • The change in price arising from a change in income

  • The demand of a good

Explanation

Question 2 of 8

1

PED for all normal goods is

Select one of the following:

  • Zero

  • Negative

  • Positive

Explanation

Question 3 of 8

1

Which of the following could have a positive PED?

Select one of the following:

  • Substitutes

  • Durable Goods

  • Giffen Goods

Explanation

Question 4 of 8

1

If a good has a PED of -.5, a 30% increase in price will lead to what change in quantity demanded?

Select one of the following:

  • An increase of 60%

  • A decrease of 15%

  • An increase of 15%

Explanation

Question 5 of 8

1

Unitary elastic demand describes a situation where a percentage change in the demand for a good is _ to/than the percentage change in quantity

Select one of the following:

  • Less

  • Equal

  • Greater

Explanation

Question 6 of 8

1

Why do more expensive goods have a higher PED?

Select one of the following:

  • They're necessary for everyday living

  • People are willing to shop around for it

  • It's easy to find alternatives

Explanation

Question 7 of 8

1

Durable products have

Select one of the following:

  • A low PED

  • A PED of 0

  • A high PED

Explanation

Question 8 of 8

1

Who finds PED the least useful?

Select one of the following:

  • Suppliers

  • Consumers

  • Monopolists

  • The Government

Explanation

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