## Price, income and cross elasticity - self-test questions

1 |
## Price elasticityA cut in price from $1.50 to $1.20 sees demand for a product rise by 10%. What would the price elasticity of demand be for this product? |

2 |
## Price elasticityA firm increases its price from $8 to $12 and sees demand for the product fall by 20%. What would the price elasticity of demand be for this product? |

3 |
## Income elasticityWhat type of good would you expected to have a negative income elasticity of demand? |

4 |
## Income elasticityIf disposable incomes rise by 5% and the income elasticity of demand is known to be 0.5, what change in demand would we expect to see? |

5 |
## Price elasticityIf a price cut does not lead to an increase in revenue, we might infer that the demand for this product is? |

6 |
## Price elasticityIf the price elasticity of demand for a product is known to be (-) 2.5 and the firm cuts the price of this product by 5%, what change would we expect to see in the demand for this product? |

7 |
## Price elasticityIf the price elasticity of demand for a product is known to be (-) 0.5 and the firm increases the price of this product by 10%, what change would we expect to see in the demand for this product? |

8 |
## Price elasticityIf the price elasticity of demand for a product is known to be (-) 2.5 and the firm increases the price of this product by 5%, what change would we expect to see in the demand for this product? |

9 |
## Sales in a recessionIn a recession, which sort of good would we expect to see a rise in sales for? |

10 |
## Price elasticityA cut in price from $75 to $60 sees demand for a product rise by from 1,200 units to 1,500 units. What would the price elasticity of demand be for this product? |

11 |
## Income elasticityIf disposable incomes rise by 2% and the income elasticity of demand is known to be 1.5, what change in demand would we expected to see? |

12 |
## Price elasticity
The image below shows a medium size yacht. What would you expect the value of the price elasticity of demand for yachts to be? |

13 |
## Price elasticity
The image below shows cigarettes. What would you expect the value of the price elasticity of demand for cigarettes to be? |

14 |
## Price elasticity
The image below shows wheat being harvested. What would you expect the value of the price elasticity of demand for wheat to be? |