Cambridge International as and a level Economics Ebook

Figure 11.1 
Example of a revision card
Elasticity – responsiveness of quantity demanded to a change in price, income or prices of substitutes or complements
PED
change in qty demanded
change in price
=
%
%
elastic >1 applies to
inelastic
<1 all 
measures
unitary
=
1
YED
change in qty demanded
change in income
=
%
%
+
ve – normal goods
−
ve – inferior goods
XED
change in qty demanded good A
change in price good B
= %
,
%
,
+
ve – subsitutes
−
ve – complements
Use and applications:
prediction of eff ects of price changes on quantity demanded; forecast eff ects of a change in income on 
demand; pricing strategies for firms in competitive markets
Examples:
low 
PED 
– 
petrol, 
alcohol
normal 
goods 
– 
many 
consumer 
goods
inferior 
goods 
– 
cheap 
margarine, 
black 
and 
white 
TVs
substitutes 
– 
pork 
and 
chicken, 
car 
and 
bus 
travel
complements 
– 
petrol 
and 
car 
travel
275
Chapter 11: Preparing for examinations 

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Examination questions
Types of question
Th
ere are three main types of question in the Cambridge 
International AS Level and A Level Economics 
examinations. Examples of each can be found on the 
accompanying CD. Th
ese are:
1
multiple-choice 
questions
2
data-response 
questions
3
essay questions, including two-part structured questions.
Let us look at each type of question in turn, as various 
skills are being examined in each of these forms of 
question.