Who Wants to be an Economics Millionaire?

Olli RehnDavid Mc Williams

Brian Lenihan LC Honours Student

Price Elasticity of Demand measures

The responsiveness of price to a change in income

The responsiveness of demand to a change in price

The responsiveness of supply to a change in price

The responsiveness of demand for one good to change in the price of another good

Which of the following is not a type of response?

Elastic Unit Elastic

Perfectly Unit Elastic Inelastic

An elastic response is indicated by .

Greater than one & less than infinity

One

Less than one but greater than zero

Zero

A minus sign for the Price Elasticity of Demand answer indicates?

Price & Demand don’t change

Price & Demand move in the same direction

A Price change does not affect demand

Price & Demand move in opposite directions

The Price Elasticity of Demand for a Giffen good is indicated by

Unit Elastic Answer + Answer

Perfectly Elastic Answer

- Answer

The Cross Elasticity of Demand for a Close Substitute Good is indicated by

+ 0.75 + 15

- 12 - 0.5

Income Elasticity of Demand for a Normal Good is?

Sometimes a negative answer

A positive answer

A negative answer An inelastic answer

Which of the following is an elastic response?

+ 1 - 0.5

+ 10 - 0.75

Which of the following is likely to have a relatively inelastic response?

Box of Matches Luxury Sports Car

TV Ariel Washing Powder

The level of sales is 10,000 units. If the Income Elasticity of Demand is + 5 what will the new level of sales if income falls by 4%?.

14,000 units 12,000 units

8,000 units 5,000 units

If a customer spends €200 when the price is €1.50 and spends €210 when the price is decreased to €1.25 what is the type of Price elasticity of Demand response?.

Perfectly Inelastic Inelastic

Elastic Unit Elastic

In the Budget which goods are considered to be the “ Old Reliables” ?

Health, Education & Social Welfare

Cars, TV’s & Washing Machines

Cigarettes, Alcohol & Petrol

Bread, Milk & Tea

Which of the following goods will result in an increase in Total Revenue if the price is increased?

PED – 2.5 PED Zero

PED – 10 PED - 1

If the Income Elasticity of Demand for a good is – 2.5. Which of the following classifications would apply?

Could possibly be a Giffen Good

Is certain to be a Giffen Good

Is not a Giffen Good Is a Normal Good

The Price Elasticity of Demand for a profit maximising firm in long run equilibrium is

Elastic Unit Elastic

Inelastic Perfectly Inelastic