When the price of a sandwich rises from €4 to €5, the quantity demanded falls from 200 to 170 a day. What is the PED, and what does it show?
IB Economics, SL and HL.
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The whole course, SL and HL
- Unit 1: Introduction to economics: 2 topics.
- Unit 2: Microeconomics: 12 topics, 4 of them HL only.
- Unit 3: Macroeconomics: 9 topics.
- Unit 4: The global economy: 10 topics.
HL students also get the 4 HL-only topics and the HL questions inside every unit. Paper 3, the HL policy paper, is practised with calculations worked step by step and policy recommendations Mia reads against the markbands. Switch between SL and HL on any practice page.
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Question 11 mark
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Written question 1Paper 1 essay25 marks
Elasticity, revenue and taxes
Answer both parts.
(a) Explain10 marks
Using a diagram, explain the relationship between price elasticity of demand and a firm's total revenue.
0 words
(b) Evaluate15 marks
Using real-world examples, evaluate the importance of price elasticity of demand for a government choosing which goods to tax.
0 words