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A possible reason that the demand for petrol is inelastic is because petrol is a luxury good. households spend a small proportion of their income on petrol. a large proportion of the petrol South Africa consumes is imported. there is no close substit$2.84
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A possible reason that the demand for petrol is inelastic is because petrol is a luxury good. households spend a small proportion of their income on petrol. a large proportion of the petrol South Africa consumes is imported. there is no close substit
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Course
Economics IA (ECS1501)
Institution
University Of South Africa (Unisa)
Book
Economics for South African Students
ECS1501 ASSESSMENT 6 2024
Producers are interested in the price elasticity of the demand for their product because it indicates what will happen to their total revenue (= P x Q) when the price of the product changes. Note, you will lose 50% of the mark for this question if you choose the incorr...
Started on Wednesday, 7 August 2024, 5:54 PM
State Finished
Completed on Wednesday, 7 August 2024, 6:07 PM
Time taken 13 mins 13 secs
Marks 12.00/12.00
Grade 100.00 out of 100.00
Question 1
Complete
Not graded
I confirm
that this assessment will be my own individual work;
that I will not communicate with anyone else in any way during the completion of this assessment;
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
Question 2
Complete
Mark 1.00 out of 1.00
Price elasticity of demand gives us a measure of how sensitive or responsive the ________ of a good or service is to a change
in the _________ of a good or service.
price; quantity demanded
quantity demanded; price
demand; price
price; demand
This question assessed your definition of the price elasticity of demand: “The price elasticity of demand is the percentage
change in quantity demanded if the price of the product changes by one per cent.” In other words, price elasticity indicates
how sensitive or responsive quantity demanded is to a change in price.
If the price elasticity of demand for Omo washing powder is 3.0, a ________ drop in price leads to a __________ rise in the
quantity demanded.
R1 000; 3000-unit
12 per cent; 4 per cent
R1 000; 333-unit
12 per cent; 36 per cent
If the price elasticity of demand for Omo washing powder is 3.0, it means the percentage change in quantity demanded is 3
times bigger than the percentage change in price.
Question 4
Complete
Mark 1.00 out of 1.00
The more (or better) substitutes a good has, the greater the price elasticity of the demand for the good will be.
Note, you will lose 50% of the mark for this question if you choose the incorrect option.
If you are not sure about the answer and do not want to guess, choose the “Unsure” option. You will neither receive marks for
the question nor will you lose marks for choosing this option.
True
False
Unsure
The availability of substitutes affects the responsiveness of consumers to changes in the price of a good. If there are many
substitutes available, consumers can easily switch to a different product if the price of one product becomes too high,
making the demand for the original product more elastic.
Price elasticity of demand is a measure of the responsiveness of quantity demanded to changes in price.
Note, you will lose 50% of the mark for this question if you choose the incorrect option.
If you are not sure about the answer and do not want to guess, choose the “Unsure” option. You will neither receive marks for
the question nor will you lose marks for choosing this option.
True
False
Unsure
The statement is true. Price elasticity of demand is a measure of the responsiveness of quantity demanded to changes in
price. It measures the percentage change in quantity demanded in response to a percentage change in price.
Question 6
Complete
Mark 1.00 out of 1.00
Producers are interested in the price elasticity of the demand for their product because it indicates what will happen to their
total revenue (= P x Q) when the price of the product changes.
Note, you will lose 50% of the mark for this question if you choose the incorrect option.
If you are not sure about the answer and do not want to guess, choose the “Unsure” option. You will neither receive marks for
the question nor will you lose marks for choosing this option.
True
False
Unsure
The statement is true. Producers are interested in the price elasticity of demand for their product because it indicates what
will happen to their total revenue (= P x Q) when the price of the product changes.
If the price elasticity of demand for a product is elastic (i.e., greater than 1), a decrease in price will lead to an increase in
quantity demanded that is proportionally greater than the decrease in price. As a result, the total revenue of the producer will
increase. On the other hand, if the price elasticity of demand for a product is inelastic (i.e., less than 1), a decrease in price
will lead to an increase in quantity demanded that is proportionally less than the decrease in price. As a result, the total
revenue of the producer will decrease.
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