Grade 9 Cognitive Test

The table shows the quantity that producers are willing to supply at different price levels.

• 0.16

• 4

• 6

• 60

Which of the following would likely result in a more elastic supply?

• Unique and specialised products

• Easy availability of production inputs

• Limited Production Capacity

• High storage costs

Which of the following factors does not influence the price elasticity of supply?

• The mobility of the factors of production

• The availability of substitutes

• Spare Capacity

• The time period involved

The PES of salt is considered to be relatively elastic in the long term.

Which of the following illustrations would best demonstrate this?

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The table shows the effect of a change in the market price from $5 to $6 on the supply of mobile (cell) phones.

Which statement about the price elasticity of supply of mobile phones is correct?

• Price elasticity of supply is 0.4.

• Price elasticity of supply is 2.5.

• Supply is perfectly elastic.

• There is unit elasticity.

The price elasticity of supply of a good is 2. The price of the good then falls by 10%. What is the effect on quantity supplied?

• It falls by 0.2%.

• It falls by 20%.

• It increases by 0.2%.

• It increases by 20%.

What is the key characteristic of a product with a perfectly inelastic price elasticity of supply (PES)?

• Producers can easily adjust production quantities

• The PES value is equal to 1

• Consumers are highly responsive to price changes

• Quantity supplied remains constant regardless of price changes

The main industries in the Seychelles, an island country in the Indian ocean, are tourism and fishing. The price elasticity of supply of fish is affected by the relatively short time that fish can be stored. Economic goods and free goods play a role in both fishing and tourism. With rises in the skills of workers and an increase in enterprise, GDP per head has increased by more than seven times over the last fifty years. 

State the formula for calculating the price elasticity of supply (PES).

In England football stadiums are usually built and financed by the private sector, but in some countries the stadiums are built and financed by the government. Many football stadiums in the English Premier League are full on match days. In the short run the supply of seats is perfectly inelastic. The football clubs could actually raise prices, still sell their tickets and so raise their profits. Premier League footballers currently receive very high wages.

Define perfectly inelastic supply.

The main industries in the Seychelles, an island country in the Indian ocean, are tourism and fishing. The price elasticity of supply of fish is affected by the relatively short time that fish can be stored. Economic goods and free goods play a role in both fishing and tourism. With rises in the skills of workers and an increase in enterprise, GDP per head has increased by more than seven times over the last fifty years. 

Define price elasticity of supply.