10 Questions
What is price elasticity of demand (PED)?
Price elasticity of demand (PED) is a measure of how sensitive the quantity demanded is to its price. It indicates the percentage change in quantity demanded when there is a one percent increase in price, holding other factors constant.
What does a price elasticity of -2 mean?
A price elasticity of -2 means that a one percent price rise leads to a two percent decline in quantity demanded.
Are price elasticities always negative?
Yes, price elasticities are negative except in special cases.
What does it mean when a good is described as 'more elastic'?
When a good is described as 'more elastic', it means that its elasticity has a greater magnitude, ignoring the sign.
What are Veblen and Giffen goods?
Veblen and Giffen goods are two classifications of goods, but the sentence is incomplete in the given text.
What is the economic model of price determination in a market?
Supply and demand
What is the relationship between the quantity demanded and the quantity supplied in a competitive market?
They are equal at the current price
What is the theoretical basis of modern economics?
The concept of supply and demand
What is the purpose of a supply schedule?
To show the relationship between the price of a good and the quantity supplied by producers
What is depicted graphically as a supply curve?
A supply schedule
Test your knowledge on price elasticity of demand with this quiz! Learn about the concept and its importance in measuring the sensitivity of quantity demanded to changes in price. Explore how different goods exhibit varying price elasticities and their implications.
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