Economics 2281 · O Level · Price elasticity of supply (PES)
Price elasticity of supply (PES) — practice question
Uzbekistan's cotton and gas are two of its leading industries. In cotton production, Uzbekistan ranks seventh in the world and fifth for exports. The Uzbek government has tried to alter the cotton industry's price elasticity of supply, and it has almost removed child labour from cotton production. Gas output in the country rose by 7% in 2018, while the average cost of gas production fell.
(a)[2]
Identify any two determinants of price elasticity of supply.
(b)[4]
Explain two benefits to an economy from ending child labour.
(c)[6]
Analyse how average cost may vary as output rises.
(d)[8]
Discuss whether an economy would gain from devoting a larger share of its resources to 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” …