Assessment map

Unit 2.5-2.6: Elasticity

This page provides a map of the various assessments included in the unit, including short answers responses, essays and areas for discussion.  I have included a section A and section B blank essay template which will help your classes prepare their essay responses.

Unit 2.5: Price elasticity of demand (PED)

SyllabusAssessment

Understand the concept of price elasticity of demand, as the responsiveness of quantity demanded to a change in price, along a given demand curve

Short answer activities available at: Price elasticity of demand 

Determinants of PED—number and closeness of substitutes, degree of necessity, proportion of income spent on the good, time e.t.c.

Relationship between PED and total revenue

Determinants of PED activity, available at: Determinants of price elasticity  

Calculate PED using the equation percentage change in quantity demanded / percentage change in price (HL only)

Mathematical calculations exercise: A mathematical note about elasticity  

Using diagrams to explain the values and concepts of PED, price inelastic demand, unit elastic demand, perfectly elastic demand and perfectly inelastic demandPED elasticity exercise (ranking goods by PED elasticity)
Degrees of PED—theoretical range of values for PEDShort answer activities on page: Unit 2.5: Price elasticity of demand 
Changing PED along a straight line downward sloping demand curve (HL only)Mathematical calculations exercise: A mathematical note about elasticity  
Examine the role of PED for firms in making decisions regarding price changes and their effect on total revenue

Essay question, available at: Demand and supply questions

Revision exercise available as a PDF file at:  Elasticity practise

Applying PED, available at: PED elasticity and sales revenue? 

Explain why the PED for many primary commodities is relatively low and the PED for manufactured products is relatively high (HL only)Homework essay on elasticity, available at: Elasticity question
Examine the significance of PED for government in relation to indirect taxesEssay question, available at: Demand and supply questions
Unit 2.5: Price elasticity of supply (PES)
SyllabusAssessment
Understand the concept of price elasticity of supply, as the responsiveness of quantity supplied to a change in price, along a given supply curveShort answer activities available at: Price elasticity of supply 

Calculate PES using the equation percentage change in quantity supply / percentage change in price (HL only)

PES activities, available at: Unit 2.6: Price elasticity of supply 

Mathematical calculations for PES, available at: Types of elasticity practise 

Using diagrams to explain the values and concepts of PES, price inelastic supply, unit elastic supply, perfectly elastic supply and perfectly inelastic supply

PES essay question on perfectly supply elasticity, available as a PDF at:  Stadium question

Short answer questions, available at:  PES elasticity

Understanding the determinants of PES, e.g. the including time, mobility of factors of production, unused capacity and ability to store stocks

Reflection activity on page: Price elasticity of supply 
Explain why the PES for primary commodities is relatively low and the PES for manufactured products is relatively high (HL only)Practise essay questions, available as activity 6 at: Price elasticity of supply 

Unit 2.5: Income elasticity of demand (YED)

SyllabusAssessment
An understanding of income elasticity of demand, as the responsiveness of demand (and hence a shifting demand curve) to a change in incomeShort answer activities, available at: Income elasticity of demand (YED) 
Calculate YED using the equation percentage change in quantity demanded /
percentage change in income
(HL only)

Short answer activities, available at: Income elasticity of demand (YED) 

An understanding of why normal goods have a positive value of YED and inferior goods have a negative value of YED.  A recognition of the difference between the YED of necessity (income inelastic) goods and luxury (income elastic) goods and services

Short answer activities, available at: Income elasticity of demand (YED) 
The implications for the producers of primary products with low YED and the producers of manufactured products and services with more elastic YED (HL only)Practise essay question, available at: Demand and supply questions  

Old syllabus: Cross price elasticity of demand (XED)

SyllabusAssessment
An understanding of the concept of cross price elasticity of demand as the responsiveness of demand for one good (and hence a shifting demand curve) to a change in the price of another goodShort answer activities, available at: Cross elasticity of demand 
Learning how to calculate XED using the equation, XED (percentage change in quantity demanded of good) x percentage change in price of good y

XED questions, available as a PDF at:  XED activities

Illustrate that substitute goods have a positive value of XED and complementary goods have a negative value of XED, with the value of XED depending on the closeness of the relationship between two goodsXED questions, available as a PDF at:  XED activities
Application of XED theory to increase sales revenue.Practise essay question, available at: Demand and supply questions  

Blank essay template available at:  Section A essay template

Section B essay template

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