Economics 0455 · IGCSE · Price elasticity of supply (PES)
Price elasticity of supply (PES) — practice question
In the US, the supply of meat from emus, a large bird, is price-elastic. More recently, US farmers have moved from keeping other livestock and growing crops, which has altered their demand for labour. Their decisions are affected by government subsidies for producing chosen food items. Some people are unwilling to work on farms because they believe rural living standards are low.
(a)[2]
Define what elastic supply means.
(b)[4]
Explain two reasons why a government may choose to subsidise food production.
(c)[6]
Analyse what affects a farmer’s demand for labour.
(d)[8]
Discuss whether people in cities have a higher standard of living than those in rural areas.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The percentage change in quantity supplied is larger than the percentage change in price” …