DP Economics Questionbank

Explain how the value of the cross price elasticity of demand (XED) for a particular good is determined by its relationship to other goods.

Examine the significance of both cross price elasticity of demand and income elasticity of demand for a firm.

Widgets and Pidgets have negative cross price elasticity of demand (XED).
Explain how the demand function for Widgets, Qd = 249 − 4P, is likely to change as a result of an increase in the price of Pidgets.

Evaluate the importance of cross price elasticity of demand for a business selling a good if the price of a related good increases.

Discuss the importance of price elasticity of demand and cross price elasticity of demand for a firm’s decision making.

Table 1 provides information about Good X and Good Y, which are related goods.

Table 1

Using Table 1, calculate the cross price elasticity of demand between Good X and Good Y when the price of Good X increases.

Using a definition of price elasticity of demand, explain why “the revenues received by the nation’s biggest exporters continue to fall” (paragraph 5).

Calculate the price elasticity of demand when price falls from $10 to $8.

Examine the significance of price elasticity of demand for the decision making of firms and government.

Explain two determinants of the price elasticity of demand (PED).

State the value of the price elasticity of supply (PES) for tickets to the 2018 Football World Cup final.

Explain why price elasticity of demand varies along the length of a straight-line demand curve.

Examine the significance of price elasticity of demand for the decision-making of firms and governments. 

Discuss the significance of price elasticity of demand (PED) for a government imposing an indirect tax on a good.

Explain how knowledge of price elasticity of demand could be used by a firm that is considering changing the price of its product.

Explain why the price elasticity of demand for primary commodities is often relatively low while the price elasticity of demand for manufactured goods is often relatively high.

Discuss the importance of price elasticity of demand and cross price elasticity of demand for a firm’s decision making.

Evaluate the consequences of rising incomes on service sector producers (such as hotels) and primary sector producers (such as rice farmers).

Explain why an increase in incomes over time may lead to an increase in demand for some goods but a decrease in demand for other goods.

The income elasticity of demand for primary commodities tends to be relatively low, while the income elasticity of demand for manufactured goods and services tends to be higher. Examine the likely effects of this for individual producers and for the economy as a whole.

Examine the significance of both cross price elasticity of demand and income elasticity of demand for a firm.

Country D is an economically less developed country that specializes in the production of primary products. 

Explain two implications for Country D of a relatively low income elasticity of demand for its primary products.

Good A and Good B are in joint supply.

Using a diagram to support your answer, explain the impact on the market for Good B of an increase in the price of Good A.

The time taken to produce goods is an important determinant of the price elasticity of supply.

Apart from time, explain two factors which influence the price elasticity of supply.