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Price elasticity of demand survey

Mark Maier Glendale Community College (CA)
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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project

Summary

Working in small groups, students are assigned a good or service and asked to predict its price elasticity of demand. Students then conduct a survey of classmates to gather data that can be used to calculate the elasticity. Students compare the calculated elasticity with the expected elasticity and explain its value based on the textbook's determinants of elasticity.

Learning Goals

Price elasticity of demand; determinants of price elasticity of demand

Context for Use

Appropriate for principles of microeconomics course.

Description and Teaching Materials

1. Small groups of three to five students (see Cooperative Learning module) are assigned a good or service (see below for recommended goods or services). Each student receives a copy of the worksheet.

2. Working as a group, students estimate the price elasticity of demand for this item. Then they survey classmates, first of their own willingness to buy the good or service, and then a survey of at least one other group in the class.

3. After calculating the price elasticity of demand, students compare the result with their initial estimate and answer follow-up questions on the worksheet.
Price elasticity of demand survey worksheet (Microsoft Word 22kB Jul29 12)

Teaching Notes and Tips

Recommended goods or services (use these or other items relevant for your students) : one hour of tutoring for course; set of class notes for the course from a previous semester; guaranteed and additional fee parking spot on campus; used 2006 Toyota Camry with 90,000 miles; box lunch with sandwich, fruit, drink)

In order for groups to share their results, ask one person from each group to put the result and name of the item on a number line (running from 0 to 6.0 in order to accommodate likely calculated elasticities) After the surveys are complete, use the number line for class discussion about the reasons for item's elasticity/inelasticity.

Assessment

Ask students to explain how price elasticity actually is measured by economists? In other words, what were the limitations of this survey.

Ask students what would cause the measured elasticities to increase or decrease. Use this discussion to reintroduce the determinants of elasticity.

References and Resources

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