Sample 2

IB Economics: Sample 2

1. (a) Explain two reasons why the demand for primary commodities might be price inelastic. [10]Student answerPrimary commodities means goods usually produced through agriculture, mining and fishing. An example is coffee produced in Brazil. Price elasticity of demand is a measure of responsiveness of the quantity demanded of a good to a change in price. PED is calculated as a percentage change in quantity demanded divided...


