- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 2. Elasticities of Demand
CFA Practice Question
Measuring the price of gasoline in dollars, an economist calculates the price elasticity of demand to be 0.5. What would the price elasticity of demand be if the economist had chosen to measure the price of gasoline in pennies rather than dollars?
A. 0.5
B. 0.05
C. 0.005
Correct Answer: A
Elasticity is independent of units.
User Contributed Comments 8
| User | Comment |
|---|---|
| airborne | that was a good one |
| Chimuriwo | Yeah, it is a good one mate! |
| odette | I was beaten to divide 0.5 by 100 |
| thekobe | no matter what is the unit, remember change in P/change in q |
| yraz | Got me, lol |
| cfastudypl | GOOD ONE AN! |
| Huricane74 | @theKobe: Price Elasticity of Demand is: Price Elasticity = (Percentage in Quantity) / (Percent Change in Price) |
| jmliguori | Good? I think that is a waste of a question. I can't imagine something like that on the test. |