Elasticity of Demand Worksheet
Grade 12 Economics worksheet covering the concepts, calculations, and real-world applications of price elasticity of demand.
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Topics
Elasticity of Demand
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Read each question carefully and answer to the best of your ability. Show all calculations where applicable.
1. Which of the following goods is most likely to have an inelastic demand?
Luxury cars
Insulin for a diabetic
Restaurant meals
Concert tickets
2. If the price elasticity of demand for a good is 0.5, then a 10% increase in price will lead to a:
5% decrease in quantity demanded
5% increase in quantity demanded
20% decrease in quantity demanded
20% increase in quantity demanded
3. If the price elasticity of demand is greater than 1, demand is considered .
4. The availability of is a major determinant of the price elasticity of demand.
5. A perfectly demand curve is a vertical line.
6. Explain the difference between elastic and inelastic demand. Provide an example for each.
7. How does the proportion of income spent on a good affect its price elasticity of demand?
8. The demand for necessities is typically more elastic than the demand for luxuries.
True
False
9. If a good has many close substitutes, its demand will be more inelastic.
True
False
10. Suppose the price of a product increases from $10 to $12, and the quantity demanded decreases from 100 units to 80 units. Calculate the price elasticity of demand using the midpoint method. Is the demand elastic or inelastic?