Price Elasticity of Supply 1 - A Level Economics MCQ Quiz

Question 1/12

Price elasticity of supply is likely to be higher for an industry where

production requires highly specialised skilled labour. stocks of finished goods are very low. the industry has high barriers to entry. firms are operating well below their full production capacity. firms are already operating at full capacity.

Question 2/12

A furniture manufacturer is able to buy any quantity of timber it needs on the world market at the prevailing world price, without affecting that price. This means the manufacturer faces a supply curve for timber that is

relatively elastic but not perfectly so. perfectly inelastic. unitary elastic. perfectly elastic. relatively inelastic.

Question 3/12

Price elasticity of supply measures the responsiveness of the quantity supplied of a good to a change in its

cost of production. price. demand. quantity demanded. profitability.

Question 4/12

To calculate the percentage change in quantity supplied following a price change, the price elasticity of supply should be

subtracted from the percentage change in price. divided by the percentage change in quantity supplied. divided by the percentage change in price. added to the percentage change in price. multiplied by the percentage change in price.

Question 5/12

For a normal, upward-sloping supply curve, the price elasticity of supply is

always zero. always less than 1. always negative. always greater than 1. always positive.

Question 6/12

For the majority of goods, the value of the price elasticity of supply will be

less than -1. equal to -1. between -1 and zero. zero. positive.

Question 7/12

A rise in the price of strawberries from £6 to £8 per kg encourages growers to increase their supply from 500kg to 700kg per week. What is the price elasticity of supply for strawberries?

0.2 1.5 1.2 2.4 0.83

Question 8/12

The table below shows the weekly supply of a good produced by four firms when price rises from £20 to £25.

	Price £20 (units)	Price £25 (units)
Firm A	1000	1200
Firm B	500	650
Firm C	800	1000
Firm D	300	330

Over this price range, which firm has unitary price elasticity of supply for its good?

Firm A Firm B Firm C Firm D Cannot be determined from the data

Question 9/12

A product has a price elasticity of supply of +0.6. If its price rises from £50 to £60, its supply will

increase by 33.3%. increase by 6%. decrease by 12%. increase by 12%. increase by 20%.

Question 10/12

A farm shop is willing to supply 400 punnets of strawberries per day at a price of £3 per punnet. The price elasticity of supply for strawberries at this shop is 1.5. If the price rises to £3.60, how many punnets will the shop be willing to supply?

440 460 480 520 600

Question 11/12

In 2023, the global price of lithium rose sharply due to a surge in demand from electric vehicle manufacturers. Industry analysts noted that lithium mining companies could not expand output significantly in the short term, since developing new mines typically takes several years. This implies that:

The demand for lithium is relatively price elastic. The supply of lithium is relatively price inelastic in the short term. The demand for lithium is perfectly price inelastic. Lithium and electric vehicles have a negative cross elasticity of demand. The supply of lithium is relatively price elastic in the short term.

Question 12/12

Following an unexpected frost that damaged citrus orchards, the price of oranges rose sharply. Growers explained that even though prices were now much higher, they could not increase the number of oranges harvested that season, since the trees had already fixed their yield for the year. This suggests that, in the short run, the supply of oranges is:

Relatively price inelastic. Unitary price elastic. Relatively price elastic. Perfectly price elastic. Perfectly price inelastic.