
Economics 10 Q5 - PED
Quiz
•
Financial Education
•
9th - 12th Grade
•
Easy

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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