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    Quiz - PED

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    giovanni pan
    This document contains a 10 question multiple choice quiz about price elasticity of demand (PED). It tests understanding of key concepts such as: [1] Calculating PED based on a price change and sales volume change. [2] Uses of knowing a product's PED. [3] Effects of price changes on total revenue for elastic and inelastic goods. [4] Factors that influence a good's elasticity. It concludes with three short answer questions defining PED and discussing factors that influence elasticity and the difference between elastic and inelastic demand.

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    Quiz - PED

    Uploaded by

    giovanni pan
    11 views3 pages
    This document contains a 10 question multiple choice quiz about price elasticity of demand (PED). It tests understanding of key concepts such as: [1] Calculating PED based on a price change and sales volume change. [2] Uses of knowing a product's PED. [3] Effects of price changes on total revenue for elastic and inelastic goods. [4] Factors that influence a good's elasticity. It concludes with three short answer questions defining PED and discussing factors that influence elasticity and the difference between elastic and inelastic demand.

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    Quiz- PED

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    This document contains a 10 question multiple choice quiz about price elasticity of demand (PED). It tests understanding of key concepts such as: [1] Calculating PED based on a price change and sales volume change. [2] Uses of knowing a product's PED. [3] Effects of price changes on total revenue for elastic and inelastic goods. [4] Factors that influence a good's elasticity. It concludes with three short answer questions defining PED and discussing factors that influence elasticity and the difference between elastic and inelastic demand.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    11 views3 pages

    Quiz - PED

    Uploaded by

    giovanni pan
    This document contains a 10 question multiple choice quiz about price elasticity of demand (PED). It tests understanding of key concepts such as: [1] Calculating PED based on a price change and sales volume change. [2] Uses of knowing a product's PED. [3] Effects of price changes on total revenue for elastic and inelastic goods. [4] Factors that influence a good's elasticity. It concludes with three short answer questions defining PED and discussing factors that influence elasticity and the difference between elastic and inelastic demand.

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    Quiz

    I. Multiple choice.
    1. What is the price elasticity of demand (PED) for a product for which a
    10% price rise reduces sales volume by 5%?
    A. - 0.5 C. -0.2

    B. -2.0 D. -5.0

    2. Which of the following is a use of price elasticity of demand?


    A. To calculate consumer spending based on their disposable income

    B. To identify changes in the spending patterns of consumers

    C. To calculate changes in the general price level

    D. To estimate the changes in a firm's costs of production

    3. A price cut from $2 to $1.50 causes the demand for peas to rise from
    10.000 units to 11.500 units. What is the price elasticity of demand for
    peas?
    A. -3.0 C. +3.0

    B. -0.6 D. +0.6

    4. Demand for a product is likely to be price inelastic the


    A. fewer substitutes it has

    B. fewer complements it has

    C. higher its market price

    D. greater the proportion of income spent on it

    5. why is knowledge of price elasticity of demand useful?


    A. To monitor the rate of price inflation

    B. to calculate changes in disposable incomes

    C. to estimate the effects of changes in production costs

    D. to forecast the impact on revenues of different pricing strategies


    6. A product has totally inelastic price elasticity of demand. What will
    happen to total revenue if the price of the product rises by 10%?
    A. it will fall by 10%

    B. it will fall to zero

    C. it will remain unchanged

    D. it will rise by 10%

    7. The table shows four people’s demand for t-shirts at two prices. Who
    has the most elastic demand for t-shirts when the price rises from $10 to
    $15?

    A. Elsa C. Hamid

    B. George D. Shara

    8. A product has a price elasticity of demand that is greater than one.


    What will happen to total revenue if the price of the product is reduced by
    3%?
    A. It will fall by more than 3%.

    B. It will fall to zero

    C. It will be unchanged

    D. It will rise

    9. A producer has a good which PED is assessed to be 1.7. If he wishes to


    increase total revenue, what should the producer do?
    A. Increase price

    B. Keep price the same

    C. Decrease price

    D. None of the above


    10. What type of elasticity would emergency dental services have and why
    A. Inelastic - not many substitutes and necessity

    B. Elastic - not many substitutes

    C. Inelastic - luxury

    D. Elastic - lots of substitutes and luxury

    Answer sheet:
    1. 2. 3. 4. 5.

    6. 7. 8. 9. 10.

    II. Short answer questions.(10’)


    1. Define the term price elasticity of demand.

    2. Explain two factors that can influence the elasticity of a product.

    3. Analyse the difference between elastic demand and inelastic demand based on the shape of
    demand curve.

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