Lesson 4.1.3.2

4.1.3.2 Price, income and cross elasticities of demand Quiz: AQA Economics, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.1.3.2, Price, income and cross elasticities of demand: 20 multiple choice questions for the AQA Economics (7136), Unit 1: Individuals, firms, markets and market failure, written with Revision Ninja.

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The 20 questions

  1. What does price elasticity of demand measure regarding consumer behaviour?

    • Responsiveness to tax
    • Responsiveness to supply
    • Responsiveness to price
    • Responsiveness to income

  2. The price of a good rises from £2.00 to £2.50 and quantity demanded falls from 100 to 80 units. What is the PED, using the percentage method?

    • -1.25.
    • -0.25.
    • -2.5.
    • -0.8.

  3. How is demand classified if its price elasticity of demand is -0.8?

    • Perfectly elastic
    • Price inelastic
    • Unit elastic
    • Price elastic

  4. Price falls from £5 to £4 and quantity demanded rises from 200 to 250. What is PED?

    • -0.80
    • -0.25
    • -1.00
    • -1.25

  5. A firm's demand is price elastic with PED = -1.5. If it raises price by 10%, approximately how much will quantity demanded change?

    • Fall by 1.5%.
    • Fall by 15%.
    • Rise by 15%.
    • Fall by 6.7%.

  6. If demand is price elastic, what happens to total revenue when price is reduced?

    • It becomes zero
    • It rises
    • It falls
    • It stays constant

  7. What does income elasticity of demand measure regarding consumer behaviour?

    • Responsiveness to price
    • Responsiveness to income
    • Responsiveness to tax
    • Responsiveness to supply

  8. Income rises by 5% and demand rises by 10%. What is the income elasticity of demand (YED)?

    • +2.0
    • -0.5
    • -2.0
    • +0.5

  9. A good has an income elasticity of demand (YED) of -0.4. What type of good is this?

    • Inferior good
    • Complementary good
    • Normal necessity
    • Luxury good

  10. What is cross elasticity of demand (XED) calculated as?

    • %ΔQdA / %ΔIncome
    • %ΔPriceA / %ΔQdB
    • %ΔQdA / %ΔPriceB
    • %ΔPriceB / %ΔQdA

  11. The price of Pepsi rises by 10% and the quantity of Coca-Cola demanded rises by 8%. What is the XED and what is the relationship?

    • XED = -0.8, complements.
    • XED = 0.8, complements.
    • XED = 0.8, substitutes.
    • XED = 1.25, substitutes.

  12. Printer prices rise by 20% and ink cartridge demand falls by 15%. What is the XED?

    • -1.33
    • +1.33
    • +0.75
    • -0.75

  13. Two goods are close substitutes with an XED of +2.5. If the price of the rival good falls by 4%, what happens to demand for the firm's good?

    • It rises by 1.6%.
    • It falls by 1.6%.
    • It rises by 10%.
    • It falls by 10%.

  14. Which factor makes the price elasticity of demand for a product more elastic?

    • Many close substitutes
    • High necessity
    • Short time period
    • Low income proportion

  15. Which product is most likely to have price inelastic demand?

    • Chocolate bar
    • Brand-name watch
    • Essential medicine
    • Foreign holiday

  16. What happens to total revenue when the price of a price-inelastic good rises?

    • It falls
    • It becomes zero
    • It stays constant
    • It rises

  17. Why is price elasticity of demand useful for a government setting an indirect tax?

    • Predicts tax revenue
    • Guarantees profit margins
    • Eliminates market failure
    • Fixes production costs

  18. A product has an income elasticity of demand (YED) of +1.6. How is this good classified?

    • Normal necessity
    • Complementary good
    • Luxury good
    • Inferior good

  19. Two goods have a cross elasticity of demand (XED) of -0.9. What is their relationship?

    • Unrelated goods
    • Substitutes
    • Inferior goods
    • Complements

  20. Incomes rise by 10% and a good has a YED of +0.6. By how much does demand change?

    • Rises by 6%
    • Falls by 6%
    • Rises by 16%
    • Falls by 0.6%

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