Economics 10 Q5 - PED

Economics 10 Q5 - PED

9th - 12th Grade

10 Qs

quiz-placeholder

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Economics 10 Q5 - PED

Economics 10 Q5 - PED

Assessment

Quiz

Financial Education

9th - 12th Grade

Easy

Created by

Marco Correa Barrera

Used 2+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What does a PED value greater than 1 indicate?

Demand is perfectly elastic

Demand is price elastic

Demand is price inelastic

Demand is unitary elastic

Answer explanation

A PED value greater than 1 means that a percentage change in price leads to a larger percentage change in quantity demanded, indicating price elasticity.

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

If the demand curve is vertical, the PED is:

Zero

Infinity

One

Greater than one

Answer explanation

A vertical demand curve represents perfectly inelastic demand, where quantity demanded does not change regardless of price.

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

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

Luxury cars

Diamonds

Insulin for diabetics

Designer clothes

Answer explanation

Insulin is a necessity with few substitutes, so demand is relatively unresponsive to price changes, making it inelastic.

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

PED is calculated as:

Percentage change in price ÷ percentage change in quantity demanded

Percentage change in quantity demanded ÷ percentage change in price

Price ÷ quantity demanded

Quantity demanded ÷ price

Answer explanation

PED measures the responsiveness of quantity demanded to a change in price using this formula.

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following factors is most likely to make demand more elastic?

The good is a necessity

Few substitutes are available

A large proportion of income is spent on the good

The good is addictive

Answer explanation

When a good takes up a large portion of income, consumers are more sensitive to price changes, making demand more elastic.

6.

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

If the price of a product increases by 10% and quantity demanded decreases by 20%, the PED is:

0.5

1

2

0.2

Answer explanation

PED = (% change in quantity demanded) ÷ (% change in price) = -20% ÷ 10% = 2.

7.

MULTIPLE CHOICE QUESTION

3 mins • 1 pt

A product’s PED is 0.8. If the price increases by 15%, the expected decrease in quantity demanded is:

12%

8%

10%

1.2%

Answer explanation

PED = % change in quantity demanded ÷ % change in price → % change in quantity demanded = PED × % change in price = 0.8 × 15% = 12%.

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