Gco Level Economics Question Bank
GCsE O Level economics Question Bank
1. What is meant by price elasticity of demand?
[2marks]
Price elasticity of demand is a responsiveness of quantity demanded due to change in price of a commodity. 2. What is meant by price elasticity of demand? [5marks]
Price elasticity of demand is a responsiveness of quantity demanded due to change in price of a commodity. It can be calculated using a formula.
% CHANGE IN QUANTITY DEMANDED PED = % CHANGE IN PRICE
There are five types of elasticity where the value ranges from 0 to infinity. They are; Perfectly inelastic ( elasticity value is equal to 0) Perfectly elastic ( elasticity value is equal to infinity) Elastic ( elasticity value is greater than 1) Inelastic ( elasticity value is less than 1) Unitary elastic ( elasticity value is equal to 1) Note: - Candidates can include simple diagrams of different types of elasticity.
3. Discuss why the price elasticity of demand for the items mentioned in the article might differ. [5marks]
Note: - Here, no need of definition since in part –c definition of elasticity has been given) The items mentioned in the article are clothing and footwear, together with certain perfumes, hair-styles, cell-phones and household appliances. First of all clothing and foot wear can be classified as a basic human need where people find very difficult to live without that. This means any person is ready to buy these products at any price since they did not have a choice. So, these products are inelastic product where a change in price will have a very small or sometime no effect on quantity demanded. On the other hand, perfumes, hair-styles, cell-phones and household appliances are products which have lots of substitutes available in the market. This means at any time consumers can choose between these substitutes which are known as elastic product where a change in price will have a significant impact on price.
A clear route to O’level success in Economics – First
1. What is meant by price elasticity of demand?
[2marks]
Price elasticity of demand is a responsiveness of quantity demanded due to change in price of a commodity. 2. What is meant by price elasticity of demand? [5marks]
Price elasticity of demand is a responsiveness of quantity demanded due to change in price of a commodity. It can be calculated using a formula.
% CHANGE IN QUANTITY DEMANDED PED = % CHANGE IN PRICE
There are five types of elasticity where the value ranges from 0 to infinity. They are; Perfectly inelastic ( elasticity value is equal to 0) Perfectly elastic ( elasticity value is equal to infinity) Elastic ( elasticity value is greater than 1) Inelastic ( elasticity value is less than 1) Unitary elastic ( elasticity value is equal to 1) Note: - Candidates can include simple diagrams of different types of elasticity.
3. Discuss why the price elasticity of demand for the items mentioned in the article might differ. [5marks]
Note: - Here, no need of definition since in part –c definition of elasticity has been given) The items mentioned in the article are clothing and footwear, together with certain perfumes, hair-styles, cell-phones and household appliances. First of all clothing and foot wear can be classified as a basic human need where people find very difficult to live without that. This means any person is ready to buy these products at any price since they did not have a choice. So, these products are inelastic product where a change in price will have a very small or sometime no effect on quantity demanded. On the other hand, perfumes, hair-styles, cell-phones and household appliances are products which have lots of substitutes available in the market. This means at any time consumers can choose between these substitutes which are known as elastic product where a change in price will have a significant impact on price.
A clear route to O’level success in Economics – First