Revision NotesExam QuestionsFlashcardsPast Papers
IGCSEEconomicsCambridge (CIE)Exam Questions2. The Allocation of Resources2.8 Price Elasticity of Supply (PES)

Price Elasticity of Supply (PES) (Cambridge (CIE) IGCSE Economics): Exam Questions

Exam code: 0455 & 0987

59 mins26 questions

Select a download format for 2.8 Price Elasticity of Supply (PES)

Scroll for more

Select an answer set to view for
2.8 Price Elasticity of Supply (PES)

Easy
Medium
Hard
11 mark

The table shows the quantity that producers are willing to supply at different price levels.

price ($)

quantity supplied

120

150

180

20

40

80

If the price increases from $120 to $180, what would be the price elasticity of supply?

  • 0.16

  • 4

  • 6

  • 60

Choose your answer

21 mark

The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $10 to $12?

Graph showing a supply curve 'S' with price in dollars on the vertical axis and quantity in units on the horizontal axis, intersecting at 10 and 100.

  • 0.5

  • 0.75

  • 1.4

  • 2.0

Choose your answer

31 mark

Which of the following would likely result in a more elastic supply?

  • Unique and specialised products

  • Easy availability of production inputs

  • Limited production capacity

  • High storage costs

Choose your answer

41 mark

Which of the following factors does not influence the price elasticity of supply?

  • The mobility of the factors of production

  • The availability of substitutes

  • Spare capacity

  • The time period involved

Choose your answer

51 mark

The PES of salt is considered to be relatively elastic in the long term.

Which of the following illustrations would best demonstrate this?

  • 2-7-1-calculation-and-determination-of-ped---relatively-elastic
  • 2-7-1-calculation-and-determination-of-ped--relatively-inelastic
  • 2-8-1-calculation-determination-and-significance-of-pes----relatively-elastic
  • 2-8-1-calculation-determination-and-significance-of-pes---relatively-inelastic

Choose your answer

11 mark

The table shows the effect of a change in the market price from $5 to $6 on the supply of mobile (cell) phones.

price ($)

supply (units)

5

6

10000

15000

Which statement about the price elasticity of supply of mobile phones is correct?

  • Price elasticity of supply is 0.4.

  • Price elasticity of supply is 2.5.

  • Supply is perfectly elastic.

  • There is unit elasticity.

Choose your answer

21 mark

The price elasticity of supply of a good is 2. The price of the good then falls by 10%.

What is the effect on quantity supplied?

  • It falls by 0.2%.

  • It falls by 20%.

  • It increases by 0.2%.

  • It increases by 20%.

Choose your answer

31 mark

Which of the following statements about the price elasticity of supply (PES)? is accurate?

  • PES measures the responsiveness of quantity demanded to a change in price

  • PES is applicable only to luxury goods and not to essential commodities

  • A product with perfectly elastic supply has an infinite PES value

  • PES values are always negative due to the inverse relationship between price and quantity supplied

Choose your answer

41 mark

What is the key characteristic of a product with a perfectly inelastic price elasticity of supply (PES)?

  • Producers can easily adjust production quantities

  • The PES value is equal to 1

  • Consumers are highly responsive to price changes

  • Quantity supplied remains constant regardless of price changes

Choose your answer

51 mark

If the price elasticity of supply (PES) of a product is 0.5, what can be inferred about the supply responsiveness?

  • Supply is highly responsive to price change

  • Supply is inelastic and less responsive to price changes

  • Supply is perfectly elastic

  • Supply is constant regardless of price changes

Choose your answer

11 mark

A technological innovation leads to a significant increase in the production capacity of a product with inelastic supply. How might this impact the stakeholders involved?

  • Producers' revenue will decrease

  • Consumers will benefit from lower prices

  • Producers will reduce their production

  • Consumers' demand will become less elastic

Choose your answer

21 mark

Which of the following products is most likely to have an inelastic supply?

  • Generic office supplies like paper and pens

  • Bottled water during a water shortage

  • Fashion clothing with rapidly changing trends

  • Handcrafted artwork by a renowned artist

Choose your answer

3
Sme Calculator1 mark

A product has a price elasticity of supply (PES) of 0.3. If the price of the product decreases by 8%, by how much will the quantity supplied change?

  • 0.24%

  • 0.8%

  • 2.4%

  • 24%

Choose your answer

4
Sme Calculator1 mark

A product with a price elasticity of supply (PES) of 1.2 experiences a 15% decrease in price. By what percentage will the quantity supplied change?

  • 10%

  • 18%

  • 15%

  • 12%

Choose your answer

51 mark

A product has a price elasticity of supply (PES) of 0.2. How might this impact consumers and producers during a sudden surge in demand?

  • Consumers will face significantly higher prices, and producers will increase output a little

  • Consumers will face minimal price changes, and producers will struggle to increase production

  • Consumers will experience lower prices due to increased production, and producers will gain substantial revenue

  • Consumers will experience higher prices, and producers will lower production to maintain scarcity

Choose your answer