Price elasticity of demand survey
This material is replicated on a number of sites
as part of the
SERC Pedagogic Service Project
Initial Publication Date: August 23, 2012
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.
CollapseLearning 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)
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.
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.
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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.
Ask students what would cause the measured elasticities to increase or decrease. Use this discussion to reintroduce the determinants of elasticity.