1) If the price of a good is increased by 15% and the quantitydemanded changes b
ID: 1241965 • Letter: 1
Question
1) If the price of a good is increased by 15% and the quantitydemanded changes by 20% then the price elasticity of demand isequal to:a) 0.75
b) approximately -0.33
c) approximately -1.33
d) -1
(2-9)
Price Quantity demanded per period
$2.50 0
2.25 25
2.00 50
1.75 75
1.50 100
1.25 125
1.00 150
0.75 175
0.50 200
2) What is the price of elasticity of demand between $2.50 and$2.25?
a) -9
b) -19
c) indeterminate
d) none of the above
3) What is the price elasticity of demand between $2.25 and$2.00?
a)-4.00
b)-5.67
c)-9.00
d)-17.6
4) What is the price elasticity of demand between $2.00 and$1.75?
a) -2.33
b) -3.00
c) -4.00
d) none of the above
5) What is the price elasticity of demand between $1.75 and$1.50?
a) -0.42
b) -1.5
c) -1.86
d) none of the above
6) What is the price elasticity of demand between $1.50 and$1.25?
a) -1.00
b) -1.22
c) -1.50
d) -1.75
7) What is the price elasticity of demand between $1.25 and$1.00?
a) -0.60
b) -0.82
c) -1.0
d) -1.6
8) What is the price elasticity of demand between $1.00 and$0.75?
a) -0.54
b) -0.66
c) -0.75
d) -1.0
9) What is the price elasticity of demand between $0.75 and$0.50?
a) -0.25
b) -0.33
c) -0.43
d) -0.52
10) A men's tie store sold an average of 30 ties per day when theprice was $5 per tie but sold 50 of the same ties per day when theprice was $3 per tie. Hence, the absolute value of the priceelasticity of demand is:
a) greater than zero but less than 1
b) equal to 1
c) greater than 1 but less than 3
d) greater than 3
11) A shirt manufacturer sold 10 dozen shirts per day when theprice was $4 per shirt but sold 15 dozen shirts per day when theprice was $3 per shirt. Hence, the absolute value of the priceelasticity of demand is:
a) greater than zero but less than 1
b) equal to 1
c) greater than 1 but less than 3
d) greater than 3
Explanation / Answer
Price elasticity = %change in demand/%change in price % change in demand = changes/(Initial demand + finaldemand)*0.5 % change in price = changes/(Initial price + final price)*0.5 Ex for question 2 % change in demand = 25-0/(25+ 0)*0.5 = 200% % change in price = 2.25-2.5/(2.25 + 2.5)*0.5 = -10.53% PED = 200% / -10.53% = -19 1) 20%/15% = 1.333 Answer: c 2) b 3) b 4) b 5) c 6) b 7) b 8) a 9) b 10) PED = 2, c 11) PED = 1.4 , c
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