Economics 2281 · O Level · Price elasticity of supply (PES)
Price elasticity of supply (PES) — practice question
In the US, meat supply from emus, a large bird, is price-elastic. Recently, US farmers have shifted to other livestock and crop production, which has altered their demand for labour. Their choices are also shaped by government subsidies for producing selected food items. Some people are unwilling to work as farm labourers because they believe living standards in rural areas are low.
(a)[2]
Define what is meant by elastic supply.
(b)[4]
Explain two reasons why a government might subsidise food production.
(c)[6]
Analyse what factors influence a farmer’s demand for labour.
(d)[8]
Discuss whether people living in cities enjoy a higher living standard than people 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: “Percentage change in quantity supplied is larger than percentage change in price” …