📊 <strong>Data Table for Reference</strong>

If PED = -2.5, the demand is:

• Perfectly inelastic

• Inelastic

• Elastic

• Unitary elastic

A business increases the price of its product by 10%, and demand falls by 15%. What is the PED?

• -0.67

• -1.5

• -0.15

• 1.5

When a good has a positive income elasticity of demand, it is likely to be:

• Inferior

• Normal

• Complementary

• Inelastic

Which of the following will most likely have inelastic demand?

• Designer handbags

• Salt

• Airline tickets

• Smartphones

An income elasticity of demand (YED) of -0.8 indicates:

• A luxury good

• A normal good

• An inferior good

• Unitary elasticity

The formula for price elasticity of demand is:
PED = __________ / __________

• A PED value greater than 1 indicates that demand is __________.

• Products like bread and salt usually have a __________ price elasticity of demand because they are necessities.

If income rises and the demand for second-hand clothes falls, this good is considered an __________ good

A YED greater than 1 means the product is a __________ good.