Ch-11 to Ch-13 Revision IGCSE Economics

What does price elasticity of demand (PED) measure?

• A. The impact of advertising on demand.

• B. The responsiveness of demand to a change in price.

• C. The relationship between supply and price.

• D. The effect of income changes on demand.

Which of the following is likely to have the most inelastic demand?

• A. Luxury handbags.

• B. Bread.

• C. Movie tickets.

• D. Smartphones.

What happens to total revenue when price increases, and demand is price inelastic?

• A. Increases.

• B. Decreases.

• C. Remains unchanged.
  

• D. Falls to zero

Price elasticity of supply (PES) measures:

• A. The sensitivity of demand to supply changes.

• B. The responsiveness of supply to a change in price.

• C. The effect of government intervention on supply.

• D. The relationship between price and income

Which factor is most likely to make supply more elastic?

• A. The availability of spare production capacity

• B. A long production period.

• C. Scarcity of raw materials.

• D. Lack of technology.

In a market economic system, what primarily determines resource allocation?

• A. Government planning.

• B. Customs and traditions.

• C. The price mechanism.

• D. Social equity.

Which is NOT a characteristic of a market economy?

• A. Competition.

• B. Private property.

• C. Centralized planning.

• D. Consumer sovereignty.

In a market economy, what happens if demand for a product rises significantly?

• A. Prices fall.

• B. Prices rise.

• C. Supply decreases.

• D. Supply remains unchanged.

Which situation describes unitary price elasticity of demand?

• A. A 10% price increase results in a 5% drop in demand.

• B. A 10% price increase results in a 10% drop in demand.

• C. A 10% price increase results in no change in demand.

• D. A 10% price increase results in demand falling to zero.

How does a subsidy impact supply?

• A. Reduces production costs, increasing supply.

• B. Increases production costs, decreasing supply.

• C. Has no impact on supply.

• D. Reduces supply due to inefficiencies.