Teacher, create graded and non-graded assignments in minutes!

At Teachy you have access to thousands of questions, graded and non-graded assignments, projects, and lesson plans.

Free Registration

Discipline: Economics

Question topic: Price Elasticity

Source: Originais Teachy

Level of difficulty: Easy

(Originais Teachy 2023) - Question Easy of Economics

A local grocery store recently increased the price of apples from $1 to $1.20 per pound, and noticed that the quantity demanded decreased from 500 pounds per week to 400 pounds per week. In economic terms, this is a study of how the quantity demanded of a good is affected by changes in its price. Based on this scenario, can you explain the concept of price elasticity of demand and predict how further changes in the price of apples might affect the quantity demanded?
a.
The price elasticity of demand for apples in this case is -1, indicating that a 1% increase in price leads to a 1% decrease in quantity demanded.
b.
The price elasticity of demand for apples in this case is 0, indicating that changes in price do not affect the quantity demanded.
c.
The price elasticity of demand for apples in this case is 1, suggesting that a 1% increase in price leads to a 1% increase in quantity demanded.
d.
The price elasticity of demand for apples in this case is -2, indicating that a 1% increase in price leads to a 2% decrease in quantity demanded.
e.
The price elasticity of demand for apples in this case is -0.5, indicating that a 1% increase in price leads to a 0.5% decrease in quantity demanded.

Answer:

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Curabitur id consequat justo. Cras pellentesque urna ante, eget gravida quam pretium ut. Praesent aliquam nibh faucibus ligula placerat, eget pulvinar velit gravida. Nam sollicitudin pretium elit a feugiat. Vestibulum pharetra, sem quis tempor volutpat, magna diam tincidunt enim, in ullamcorper tellus nibh vitae turpis. In egestas convallis ultrices.

Answer key available only for registered teachers.
Register at Teachy and get access now!

Price Elasticity
Teachy originals
Those who search for this subject, also viewed these questions...
Question 1:

Easy

A local ice cream shop has noticed that despite fluctuating prices of their ice cream due to supply chain issues, the quantity of ice cream sold remains relatively unchanged. Based on the concept of price elasticity, how would you explain this phenomenon?
Teachy originals
Question 2:

Easy

Suppose you are the manager of a company that produces smartphones. After conducting market research, you find that consumers' quantity demanded for your smartphones is highly responsive to changes in price. Based on the concept of price elasticity of demand, predict the impact on the quantity demanded if you decide to increase the price of your smartphones. Also, explain the reasoning behind your prediction.
Teachy originals
Question 3:

Easy

During Summer vacations, a popular ice cream shop in your town notices a significant increase in the demand for their ice creams. However, they have a limited supply of ice cream that they can produce each day. Using the concepts of scarcity and opportunity cost, explain what could potentially happen to the price of ice cream and how the shop might decide which flavors to produce more frequently.
Teachy originals
Question 4:

Easy

Imagine you have saved up $1000 from your part-time job and you are considering two options. Option A is to put the money in a savings account that offers a 3% annual interest rate. Option B is to invest the money in a new business venture that you believe could return a profit of $200 at the end of the year. Based on your understanding of interest, which option would yield a higher return at the end of one year and why?
Teachy originals
Did you like these questions? We have more than 100,000 like these for you, teacher!
Save time with Teachy!
With Teachy, you have access to:
Classes and contents
Automatic grading
Assignments, questions and materials
Personalized feedback
Teachy Mascot
BR flagUS flag
Terms of usePrivacy PolicyCookies Policy

2023 - All rights reserved

Follow us
on social media
Instagram LogoLinkedIn LogoTwitter Logo