GCSE Economics Revision: Price elasticity of supply (PES) (With Mock Questions!)
Hello, awesome Economics students! 🎉
Feeling ready to tackle Price Elasticity of Supply (PES)? Let’s break it down in a way that makes sense and helps you smash that exam! Stick with me, and we'll go over the key parts of PES, things you need to demonstrate in the exam, and even throw in some practice questions to get your brain working. Let's dive right in! 🚀
What is Price Elasticity of Supply (PES)? 📈
In simple terms, Price Elasticity of Supply (PES) measures how much the quantity supplied of a good responds to a change in price. If producers can quickly ramp up production when prices go up, the supply is said to be elastic. If they can’t, it’s considered inelastic.
Key Learning Items 📚
You'll want to focus on these when studying PES:
🧠 PES is a measure of how much supply changes in response to a price change.
🧠 Factors that affect PES include production time, availability of resources, and spare capacity.
🧠 The PES formula is: % Change in Quantity Supplied ÷ % Change in Price
🧠 PES values greater than 1 mean supply is elastic, while values less than 1 mean supply is inelastic.
What You Need to Demonstrate at GCSE Level 💡
To ace questions on PES, make sure you can:
✨ Define PES and explain the factors that influence it.
✨ Calculate PES using the formula.
✨ Understand and explain the difference between elastic and inelastic supply.
✨ Use real-life examples to explain why some goods have a more elastic or inelastic supply.
You’ll need to show not only your understanding of the theory but also apply it to scenarios and solve numerical problems!
Key Things to Remember Before the Exam ✍️
1️⃣ Know your formula! You should be comfortable with the PES formula and be ready to calculate it quickly.
2️⃣ Understand the factors. Remember what makes supply more elastic or inelastic, like production time, availability of stock, and resource mobility.
3️⃣ Practice using examples. Think about how different markets (like agriculture vs. tech) have different PES values and why.
4️⃣ Stay calm! You’ve got this! Make sure you give yourself plenty of time for revision and take care of your well-being. Hydrate, sleep, and go into the exam feeling strong.
Mock Questions: Test Your Knowledge! 🎯
Let’s get those brains ticking with some example questions. Test yourself and see how much you’ve picked up so far. 😉
Q1 - What does a PES value greater than 1 signify?
a) Supply is inelastic
b) Supply is elastic
c) Supply does not change with price
d) Supply is perfectly elastic
Q2 - Which of the following factors is likely to make the supply of a product more elastic?
a) The product takes a long time to produce
b) Production costs are high
c) There is spare capacity in the factory
d) The product is made from scarce resources
Q3 - If the price of a product increases by 10% and the quantity supplied increases by 5%, what is the PES?
a) 0.5
b) 1.0
c) 2.0
d) 5.0
Q4 - In which of the following situations is supply likely to be highly inelastic?
a) When there is a large number of producers
b) When production can be increased easily
c) When there are limited raw materials
d) When there is surplus stock available
Q5 - If the PES for a good is 0.8, what does this tell you about the good's supply?
a) It is elastic
b) It is perfectly elastic
c) It is inelastic
d) It does not change with price
To check your answers and see more questions check out our GCSE Economics Multiple-Choice booklet, with 250 sample questions and answers for you to revise
Take some time to go over these questions. Challenge yourself and check your answers after. If you’re unsure about anything, revise the key points and try again. Remember, practice makes progress!
Good luck with your revision! 🍀 You’ve got this! Stay positive and keep working towards that A.