6 marks
Case study · The market for meat and the growth of vegetarianism
With reference to the last paragraph of Extract B, explain two factors which are likely to influence price elasticity of supply.
Specification point 1.2.5 · Theme 1
Elasticity of supply
How markets work · Introduction to markets and market failure
Questions tagged to this specification point
14 questions
Essay questions
Long-form evaluation and discussion
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Data-response questions
Questions built around exam extracts
8 marks
Case study · UK branded coffee shop chains market
With reference to Figure 2 and your understanding of price elasticity, examine two factors that may cause significant changes in the international price of coffee beans.
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1.2.6 · Price determination1.2.5 · Elasticity of supply1.2.3 · Price, income and cross elasticities of demand
10 marks
Case study · Energy markets
With reference to Extract A and your own knowledge, assess whether the supply of uranium is likely to be price elastic or price inelastic.
5 marks
Case study · The market for housing
With reference to Figure 1, explain one possible reason for the differences in price elasticity of supply of new housing between countries.
Short-answer questions
Focused calculations, explanations and diagrams
4 marks
ContextIn 2022 the UK government provided 130 new licences for North Sea oil and gas exploration, in order to reduce energy prices. However, companies can take 20 years to begin to extract oil. Furthermore, they often have to continue producing oil even when prices fall because the equipment has no other uses.
With reference to the data above, explain the likely numerical value of the price elasticity of supply for oil.
4 marks
ContextTable: price elasticity of supply for housing in the US, 2020 – New York +0.5, Texas +1.8.
With reference to the data above, explain one likely reason for the difference in the price elasticity of supply.
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3 marks
ContextThe world’s largest producer of natural gas is the USA. In 2021 production fell even though the price increased.
Using the data provided, explain one likely factor that may influence the price elasticity of supply of gas.
3 marks
ContextIn March 2020, a substantial increase in the demand for flour resulted in the retail price of flour increasing. Despite the price rises, the supply of flour failed to keep up with the increased demand.
Explain one reason why flour producers might find it difficult to increase quantity supplied in the short run.
2 marks
ContextBetween 2016 and 2017 the average price of new build houses in the UK rose by an estimated 5.4%. Year Quantity of UK new house builds …
With reference to the data provided, calculate the price elasticity of supply for new house builds between 2016 and 2017. You are advised to show your workings.
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2 marks
ContextBetween 2016 and 2017 the average price of new build houses in the UK rose by an estimated 5.4%. Year Quantity of UK new house builds …
Explain one factor that is likely to determine the price elasticity of supply of new house builds.
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Multiple-choice questions
Quick checks of economic understanding
A-level Paper 1, June 2024, Q2(b)Multiple choice
1 mark
ContextTable: price elasticity of supply for housing in the US, 2020 – New York +0.5, Texas +1.8.
In Texas the price elasticity of supply is +1.8. Which one of the following is the percentage increase in price if the quantity of housing supplied in Texas is increased by 12%?
A0.15
B1.50
C6.67
D21.60
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AS Paper 1, June 2023, Q2(b)Multiple choice
1 mark
ContextThe world’s largest producer of natural gas is the USA. In 2021 production fell even though the price increased.
The table below shows estimates of the price elasticity of supply and price elasticity of demand for gas. Natural Gas Price elasticity of supply +0.14 Price elasticity of demand −0.10 Which one of the following can be inferred from the table?
AA 10% increase in the price of gas would cause a more than 10% increase in the supply
BGas is a normal good with income inelastic demand
CThe demand and supply of gas are both price inelastic
DThe demand for gas is more responsive to changes in price than supply
AS Paper 1, June 2022, Q5(b)Multiple choice
1 mark
ContextIn March 2020, a substantial increase in the demand for flour resulted in the retail price of flour increasing. Despite the price rises, the supply of flour failed to keep up with the increased demand.
A manufacturer has estimated that the price elasticity of supply of ice cream is +1.5. If the demand for ice cream rises and the price increases by 10%, which one of the following is the resulting percentage change in supply?
A0.15%
B1.5%
C6.67%
D15%
A-level Paper 1, June 2019, Q1(b)Multiple choice
1 mark
ContextBetween 2016 and 2017 the average price of new build houses in the UK rose by an estimated 5.4%. Year Quantity of UK new house builds …
A 2.5% increase in new build house prices in one region of the UK causes a 10% increase in the number of houses built. Ceteris paribus, this suggests that supply of new house builds is:
Aperfectly price elastic
Bperfectly price inelastic
Crelatively price elastic
Drelatively price inelastic
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