Cambridge International (CAIE) · 2 The price system and the microeconomy (AS) · 2.2 Price elasticity, income elasticity and cross elasticity of demand

Cambridge International (CAIE) Economics past paper questions: Price elasticity, income elasticity and cross elasticity of demand

Every Cambridge International (CAIE) question on Price elasticity, income elasticity and cross elasticity of demand from 2023 to 2025: 6 essays, 3 data response questions and 16 multiple choice questions. It covers 2.1 Demand and supply curves, 2.3 Price elasticity of supply, 2.4 The interaction of demand and supply, 5.3 Monetary policy and 4.6 Price stability. Each question links to its paper, mark scheme and examiner report.

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Subtopics2.1 Demand and supply curves 42.3 Price elasticity of supply 22.4 The interaction of demand and supply 15.3 Monetary policy 14.6 Price stability 1

Essay questions on price elasticity, income elasticity and cross elasticity of demand

AS Paper 2, November 2025, Q2(b)OptionalAssess12 marks

Assess the view that a business should be more concerned about the income elasticity of demand for its product than its cross elasticity of demand when incomes are falling.

Question paper p.3 Mark scheme p.15 Open in the tool Practise the YED and XED diagram

AS Paper 2, November 2024, Q2(b)OptionalAssess12 marks

Assess whether knowledge of income elasticity of demand or price elasticity of demand for its product is more useful to a business aiming to increase the total expenditure on its product during a period of economic growth.

Question paper p.4 Mark scheme p.14 Open in the tool Practise the YED and XED diagram Practise the PED and revenue diagram

AS Paper 2, March 2024, Q3(a)OptionalExplain8 marks

With the help of a formula, explain the meaning of income elasticity of demand and consider the extent to which a rise in income will increase the consumption of all goods and services.

Question paper p.4 Mark scheme p.12 Open in the tool Practise the YED and XED diagram

AS Paper 2, March 2024, Q3(b)OptionalAssess12 marks

Assess whether an estimate of the price elasticity of demand for a product is likely to be more useful to a firm than an estimate of its price elasticity of supply.

Question paper p.4 Mark scheme p.13 Open in the tool Practise the PED and PES diagram

AS Paper 2, November 2023, Q2(a)OptionalExplain8 marks

With the help of a formula, explain what is meant by the term price elasticity of demand for a product and consider the extent to which it allows an entrepreneur to determine the effect of price changes on the total expenditure on their product.

Question paper p.4 Mark scheme p.11 Examiner report p.11 Open in the tool Practise the PED and revenue diagram Practise the PED and PES diagram

AS Paper 2, November 2023, Q2(b)OptionalAssess12 marks

Assess whether the concept of price elasticity of supply or cross elasticity of demand will be more useful to a business wanting to increase its total sales in a growing economy.

Question paper p.4 Mark scheme p.12 Examiner report p.11 Open in the tool Practise the PED and PES diagram

Data response questions on price elasticity, income elasticity and cross elasticity of demand

AS Paper 2, November 2025, Q1(a)(i)Identify1 mark

Case study: How do we make sure cocoa bean farmers get paid a living wage?

Identify one possible reason for the value of price elasticity of demand (PED) for chocolate.

Question paper p.3 Mark scheme p.10 Open in the tool

AS Paper 2, March 2025, Q1(b)Explain2 marks

Case study: A global olive oil shortage

Some restaurants and commercial kitchens are using sunflower oil as an alternative to olive oil. Explain how economists could measure the impact of rising olive oil prices on the demand for sunflower oil.

Question paper p.3 Mark scheme p.9 Examiner report p.3 Open in the tool

AS Paper 2, June 2024, Q1(d)Assess6 marks

Case study: Dilemma for the European Central Bank (ECB)

Using the concept of price elasticity of demand, assess the relative impact on poorer households, including those on fixed incomes, of rising prices of food and energy.

Question paper p.3 Mark scheme p.8 Open in the tool

Multiple choice questions

AS Paper 1, November 2025, Q8
The diagram shows the demand curve for a product. What is the price at which the price elasticity of demand is unit elastic?
AS Paper 1, November 2025, Q9
Public transport in an economy has an income elasticity of demand of – 0.36. What does this mean about public transport?
AS Paper 1, June 2025, Q7
When can a product be said to have a negative income elasticity of demand?
AS Paper 1, March 2025, Q8
The diagram shows the impact on equilibrium due to an increase in the costs of production. The original price is $72. The price elasticity of demand is –2.0. What is the new equilibrium price, P2?
AS Paper 1, March 2025, Q11
A decrease in the quantity demanded of a product results in a proportionate decrease in sales revenues. What is true about its price elasticity of demand?
AS Paper 1, November 2024, Q8
What is most likely to cause the demand curve of an inferior good to shift to the right?
AS Paper 1, June 2024, Q8
The tables show the different quantities of a good demanded at different prices and levels of income. Within the range of these figures, when are both price elasticity of demand and income elasticity of demand for this good inelastic?
AS Paper 1, June 2024, Q9
In Asia, instant noodles is an inferior good because dried fruit is a better quality substitute. The diagram shows the demand for instant noodles. What could have caused the shift in the demand curve for instant noodles from D1 to D2?
AS Paper 1, March 2024, Q7
The price elasticity of demand for good X is –2.4, its income elasticity of demand is –0.4 and the cross elasticity of demand for good X with respect to good Y is +0.8. What is the correct description of good X?
AS Paper 1, March 2024, Q8
The diagram shows two straight line demand curves, X and Y. What is correct about curves X and Y?
AS Paper 1, November 2023, Q8
After a 10% decrease in a consumer’s income, the consumer’s demand for a good rises from 100 to 105. What is the value of the consumer’s income elasticity of demand for this good?
AS Paper 1, June 2023, Q6
Which pair of products are substitutes both in consumption and production?
AS Paper 1, June 2023, Q8
The cross elasticity of demand between bus travel and rail travel is +2. A rise in the price of bus fares caused the demand for rail travel to rise by 10%. Which change in bus fares would have caused this?
AS Paper 1, June 2023, Q14
In the diagram, area OP1M1Q1 is equal to area OP2M2Q2. What is the value of the price elasticity of demand if the price is halved from P1 to P2?
AS Paper 1, June 2023, Q15
The table shows changes in a consumer’s expenditure on various goods when her income increases from $20 000 to $24 000. Assuming all else remains unchanged, for which goods is the consumer’s income elasticity of demand greater than 1.0?
AS Paper 1, March 2023, Q8
A sports stadium has two prices of seats. The cheaper seats are $10 and the more expensive seats are $20. When the prices of all seats are increased by 10%, the effects on demand are a fall of 5% for the cheaper seats and a fall of 12% for…

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Essay questions on price elasticity, income elasticity and cross elasticity of demand

Data response questions on price elasticity, income elasticity and cross elasticity of demand

Multiple choice questions

More Cambridge International (CAIE) topics: 2 The price system and the microeconomy (AS)