Economics 0455 · IGCSE · Price elasticity of supply (PES)
Price elasticity of supply (PES) — practice question
Cotton and gas are two of Uzbekistan’s leading industries. Uzbekistan ranks as the world’s seventh largest cotton producer and the fifth largest cotton exporter. The Uzbek government has attempted to affect the cotton industry’s price elasticity of supply. It has also almost eliminated child labour in cotton production. In 2018, gas output rose by 7% and the average cost of gas production declined.
(a)[2]
Identify two factors that determine price elasticity of supply.
(b)[4]
Explain two advantages to an economy of ending child labour.
(c)[6]
Analyse how average cost may vary as output rises.
(d)[8]
Discuss whether or not an economy would benefit from directing more of its resources into agriculture.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Storage capacity” …