Who Wants to be an Economics Millionaire? Olli Rehn David Mc Williams Brian Lenihan LC Honours Student.

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Presentation transcript:

Who Wants to be an Economics Millionaire? Olli Rehn David 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? ElasticUnit 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

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?

Which of the following is likely to have a relatively inelastic response? Box of MatchesLuxury 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 units12,000 units 8,000 units5,000 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 ElasticUnit 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 – 2.5PED Zero PED – 10PED - 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 ElasticUnit Elastic Inelastic Perfectly Inelastic