Economics (Practicals based on Ed)

Q1 ) The demand for the good at price of Rs 4 is 25. When the price of the good increases to Rs 5, the demand for the good falls to 20 units. Calculate price elasticity of demand 2) The price of commodity is Re. 15 per unit and its quantity demanded is 500 units Its quantity demanded rises by 80 units as a result of a fall in its price by 20 per cent. Calculate its price elasticity of demand. Is its demand inelastic? Give reason for your answer.

(4 Marks)

3)The price of a commodity is Rs 50 per unit and its quantity demanded is 500 units its price rises to Rs 60 per unit and quantity demanded falls by 90 units. Calculate its price elasticity of demand. Is its demand elastic? Give reasons for your answer. 4) Price elasticity of demand for a good is (-2) .The consumer buys a certain quantity of this good at a price of Rs 8 per unit. When the price falls he buys 50 percent more quantity. What is the new price? 5) As a result of a fall in the price of a commodity from Rs 7 per kg to Rs 5 per kg, the total expenditure on it rises from Rs 3,500 to Rs 6,250. Comment on price elasticity of demand by total outlay method and by proportionate method. 6) When the price of the commodity is Rs. 10 the consumer prefers to consume 25 units of the commodity. Given that the price elasticity of demand for the commodity is 2, calculate the quantity the consumer will buy at a price of Rs. 8 per unit. 7) A seller earns revenue of Rs. 5000 from the commodity when the price of the commodity is Rs. 10 per unit. If the price elasticity of demand for the commodity is 0.5, calculate the revenue earned by the seller when the price is Rs. 15 per unit. Q8) If price falls by 10% and total expenditure rises by 10%, elasticity of demand would be one. (true/false) Q9) When the price of commodity falls by Rs.2 per unit, its quantity demanded increases by 10 units. Its price elasticity of demand is (-) 1. Calculate demand at the price before change which was Rs.10 per unit. Q10) Calculate price elasticity of demand if demand increases from 4 units to 5 units due to fall in price from Rs. 10 to Rs. 8 . Q11) The demand for good x and y have equal price elasticity. The demand of x rises from 100 units to 250 units due to a 20 percent fall in its price. Calculate the percentage rise in demand of y, if its price falls by 8 percent. Q12) The price elasticity of demand of good x is half the price elasticity of demand of good y. A 25% rise in its price of good y reduces its demabnd from 400 to 300 units. Calculate percentage rise in demand of good x when its price falls from Rs.10 to Rs. 8 per unit.

Economics (Practicals based on Ed)