Price Elasticity of Demand (HSC SSCE Economics): Quizzes
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Practise the questions
10 questions from this quiz
What does price elasticity of demand measure?
What does price elasticity of demand measure?
Consumer response to price changes
A restaurant raises prices 10%, demand falls 20%. What type of demand is this?
A restaurant raises prices 10%, demand falls 20%. What type of demand is this?
Elastic demand
Petrol prices rise 10%, consumption falls 3%. What type of demand is this?
Petrol prices rise 10%, consumption falls 3%. What type of demand is this?
Inelastic demand
Using total outlay method, when do price and total outlay move in the same direction?
Using total outlay method, when do price and total outlay move in the same direction?
When demand is inelastic
Price rises from 5 to 6, quantity falls 50 to 45. Total outlay changes from 250 to what?
Price rises from 5 to 6, quantity falls 50 to 45. Total outlay changes from 250 to what?
270
Why do governments target goods with inelastic demand for excise taxes?
Why do governments target goods with inelastic demand for excise taxes?
Ensures stable tax revenue
Products with many close substitutes typically have what type of demand?
Products with many close substitutes typically have what type of demand?
Elastic demand
Which products typically show inelastic demand?
Which products typically show inelastic demand?
Necessities
Chewing gum has inelastic demand mainly because it represents a small what?
Chewing gum has inelastic demand mainly because it represents a small what?
Proportion of income
What happens to elasticity as more time passes since a price change?
What happens to elasticity as more time passes since a price change?
Elasticity tends to increase