1. PED = %Change in QD / %Change in Price

2. The price elasticity of demand is the responsiveness (how they change their demand) of consumers to a change in the price of a good.

3. The good is inelastic

4. Perfectly Elastic = -Infinite; Perfectly Inelastic = 0; Unit Elastic = 1; A value between 0 and -1 is inelastic; A value between -1 and -Infinite is elastic.

5. If there is derived demand for a good then it means that the good is demanded for what it produces. For example labour isn’t demanded for labour but for what it produces. [...]

# Unit 1 Quiz: Microeconomics (Basics)

I have created a quiz for the Edexcel Unit 1 Exam; you won’t be asked these questions in the exam, but you need to know the answers. The answers are in a separate blog post (see here).

1. How do you calculate PED?

2. Define PED

3. If the value produced by a PED calculation was -0.6 what would it mean?

4. What values would be needed from the PED calculation to say a good is a.) elastic b.) inelastic c.) unit elastic

5. What does derived demand mean?

6. If I have a vertical demand curve what price elasticity does it have? [...]