Save
Economics Yr1 - Micro
PED
Save
Share
Learn
Content
Leaderboard
Share
Learn
Created by
Amina
Visit profile
Cards (48)
What does the basic law of demand state will happen when price increases?
Quantity demanded
will decrease
View source
According to the basic law of demand, what happens to quantity demanded when the price decreases?
Quantity demanded will
increase
View source
What information does price elasticity of demand (PED) provide beyond the basic law of demand?
How much
quantity demanded
changes
View source
What does price elasticity of demand (PED) measure?
Responsiveness
of
quantity
demanded
to
price
View source
What is the formula for price elasticity of demand (PED)?
Percentage change in quantity demanded
/
percentage change in price
View source
In the PED equation, which variable goes on the top?
Quantity demanded
View source
How do you calculate percentage change?
Difference/
original number
times
100
View source
Why is the PED value almost always negative?
Inverse relationship between
price/quantity
demanded
View source
When interpreting the PED number, what should you do with the negative sign?
Ignore
it,
focus
on
the
number
View source
What does it mean if the absolute value of PED is greater than 1?
Demand is
price elastic
View source
If demand is price elastic, how does the percentage change in quantity demanded compare to the percentage change in price?
Greater
proportionate change
View source
What does it mean if the absolute value of PED is less than 1?
Demand is
price inelastic
View source
When demand is price inelastic, how does quantity demanded change relative to the price change?
Proportionately
less change
View source
What does it mean if PED is zero?
Perfectly
price inelastic
View source
If demand is perfectly price inelastic, how does quantity demanded respond to a price change?
Quantity demanded
doesn't
change
View source
What does infinite PED signify?
Perfectly
price elastic
View source
What term is used when PED equals one?
Unit price elastic
View source
If quantity demanded decreases from 150 to 135, what is the percentage change in quantity demanded?
10%
View source
If the price of a product increases from £4 to £5, what is the percentage change in price?
25%
View source
If the percentage change in quantity demanded is -10% and the percentage change in price is 25%, what is PED?
-0.4
View source
What does it mean if the demand for cigarettes is price inelastic?
Quantity demanded
changes proportionately less
View source
If PED for a product is -0.4, is demand price elastic or inelastic?
Price
inelastic
View source
If the price of a sofa decreases from £1000 to £800, what is the percentage change in price?
-20%
View source
If quantity demanded increases from 2000 to 3800, what is the percentage change in quantity demanded?
90%
View source
If the percentage change in quantity demanded is 90% and the percentage change in price is -20%, what is the PED?
-4.5
View source
If the PED for sofas is -4.5, what does this indicate about the demand?
Demand is
price elastic
View source
How does quantity demanded change relative to the price decrease when demand is price elastic?
Increases
proportionally
more
View source
What does a steep demand curve indicate?
Price inelastic demand
View source
What happens to quantity demanded with a steep demand curve when price changes?
Changes
proportionately less
View source
What does a shallow demand curve represent?
Price elastic demand
View source
How does quantity demanded respond to price changes with a shallow demand curve?
Changes
proportionately
more
View source
What type of demand does a vertical demand line represent?
Perfectly price inelastic
View source
What does a horizontal demand line indicate?
Perfectly price elastic
View source
What is the mnemonic to remember the factors affecting PED?
SPLAT
View source
According to SPLAT, what does the 'S' stand for?
Substitutes
View source
How does the number of available substitutes affect price elasticity of demand?
More
substitutes
, more
elastic
View source
Why is the demand for commodities like coffee often price inelastic?
Few available
substitutes
View source
According to SPLAT, what does the 'P' stand for?
Percentage
of income
View source
How does the percentage of income a price change represents affect PED?
Greater percentage, more
elastic
View source
Why is the demand for cars more price elastic than the demand for apples?
Larger income
percentage
View source
See all 48 cards
See similar decks
AQA A-Level Economics
4581 cards
OCR A-Level Economics
1020 cards
1.1.4 Economic Sectors
Edexcel GCSE Economics > 1. Introduction to Economics > 1.1 The Basic Economic Problem
44 cards
6.1.2 The Role of Models in Economics
Edexcel GCSE Economics > 6. Economic Methodology and the Economic Problem > 6.1 Economic Methodology
48 cards
6. Economic Methodology and the Economic Problem
Edexcel GCSE Economics
265 cards
1.1 The Basic Economic Problem
Edexcel GCSE Economics > 1. Introduction to Economics
181 cards
1.1 The Basic Economic Problem
Edexcel GCSE Economics > 1. Introduction to Economics
138 cards
6.1 Economic Methodology
Edexcel GCSE Economics > 6. Economic Methodology and the Economic Problem
125 cards
1.1.3 Economic Agents
Edexcel GCSE Economics > 1. Introduction to Economics > 1.1 The Basic Economic Problem
21 cards
6.1 Economic Methodology
Edexcel GCSE Economics > 6. Economic Methodology and the Economic Problem
100 cards
1.1.3 Economic Agents
Edexcel GCSE Economics > 1. Introduction to Economics > 1.1 The Basic Economic Problem
31 cards
6.2.4 Economic Systems
Edexcel GCSE Economics > 6. Economic Methodology and the Economic Problem > 6.2 The Economic Problem
26 cards
4.1 Economic Growth
Edexcel GCSE Economics > 4. Macroeconomics
140 cards
1.2 The Basic Economic Problem
OCR GCSE Economics > 1. Introduction to Economics
41 cards
4.1 Economic Growth
Edexcel GCSE Economics > 4. Macroeconomics
185 cards
6. Economic Methodology and the Economic Problem
Edexcel GCSE Economics
299 cards
4.8 Development Economics
Edexcel GCSE Economics > 4. Macroeconomics
211 cards
3. Business Economics
Edexcel GCSE Economics
483 cards
5. Personal Economics
Edexcel GCSE Economics
483 cards
1.1.4 Economic Sectors
Edexcel GCSE Economics > 1. Introduction to Economics > 1.1 The Basic Economic Problem
83 cards
6.1.1 Positive and Normative Statements
Edexcel GCSE Economics > 6. Economic Methodology and the Economic Problem > 6.1 Economic Methodology
36 cards