中文（繁體）
中文（简体）
English
IB Economics: Demand Elasticity – Practice Paper 4 (10 Questions)
IB Economics: Demand Elasticity – Practice Paper 4 (10 Questions)
Paper 4 gathers all four elasticities in one paper, then uses tax incidence and total revenue to check whether students can turn an elasticity number into a policy conclusion.
Quick answer A ten percent price rise with a twenty percent fall in quantity gives an elasticity of minus two, the arc elasticity is one point one seven, and a twelve dollar tax splits four to eight between the two sides when elasticities are two and one.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 questions |
| Suggested time | 25 minutes |
| Difficulty mix | Foundation 4 · Intermediate 3 · Challenge 2 · Error redo 1 |
| Chapter | Chapter: IB Economics: Demand Elasticity – Tutor Lesson Plan |
| Level | IB SL/HL |
02 Questions (10 items)
- FoundationPrice rises by ten percent and quantity demanded falls by twenty percent. What is the price elasticity of demand?
- FoundationPrice falls from twenty to sixteen dollars and quantity rises from fifty to sixty. Find the elasticity with the simple percentage method.
- FoundationIncome elasticity of demand is plus 0.5. What type of good is this?
- FoundationCross elasticity of demand is minus 1.5. How are the two goods related?
- IntermediatePrice falls from ten to eight dollars and quantity rises from forty to fifty-two. Find the arc elasticity to two decimal places.
- IntermediateA tax of twelve dollars is imposed with demand elasticity two and supply elasticity one. How is the burden split?
- IntermediateDemand elasticity is 0.5 and the firm raises price by ten percent. What happens to total revenue and by how much?
- ChallengeDemand elasticity is 1.5 and the firm cuts price by eight percent. How does total revenue change?
- ChallengeA tax of ten dollars is imposed with demand elasticity four and supply elasticity one. How is it shared and what does this imply?
- Error redoCommon error: a price rise always raises total revenue. What is the correct condition?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | Minus 2 | Minus twenty divided by ten is minus two. |
| 2 | Minus 1 | Price falls by twenty percent and quantity rises by twenty percent, so demand is unit elastic. |
| 3 | A normal good, and specifically a necessity | A positive value below one means demand rises less than income. |
| 4 | Complements | A negative value means a price rise for one good lowers demand for the other. |
| 5 | About 1.17 | Quantity changes by twelve over forty-six and price by minus two over nine, giving one point one seven. |
| 6 | Four dollars on consumers and eight on producers | The consumer share is supply elasticity over the sum of the two elasticities, one third of twelve. |
| 7 | It rises by 4.5 percent | Quantity falls five percent, and one point one times zero point nine five gives an index of one point zero four five. |
| 8 | It rises by 3.04 percent | Quantity rises twelve percent, so zero point nine two times one point one two equals one point zero three zero four. |
| 9 | Two dollars on consumers and eight on producers, so with elastic demand the burden falls mainly on producers | The consumer share is one over the sum of elasticities, which is one fifth. |
| 10 | Only when demand is inelastic, that is elasticity below one in absolute value, does a price rise raise revenue | With elastic demand a price rise cuts revenue, so the firm should cut price instead. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
Questions and answers are written originally by the TutorZone team and are not taken from any school, publisher or examination authority paper. Every value is checked by computer.
