Elasticity of Supply (PES) Exam Questions

Cross-board concept practice · originally a CIE 9708 question, used here because the concept is the same. It is not IB Economics past-paper material.

Question 1

The diagram shows the supply curve of a product. The government imposes a specific indirect tax of $5 on the product. How will the price elasticity of supply of the product change?

Afrom elastic (>1) to inelastic (<1)Bfrom inelastic (<1) to elastic (>1)Cfrom inelastic (<1) to unitary (=1)Dfrom unitary (=1) to elastic (>1)

Cross-board concept practice · originally a CIE 9708 question, used here because the concept is the same. It is not IB Economics past-paper material.

Question 2

The diagram shows two linear supply curves labelled S1 and S2, where S2 is a 45° line. Which statement about the price elasticity of supply is correct?

AThe price elasticity of supply is different at every point along both S1 and S2.BThe price elasticity of supply of S1 is elastic and S2 is unit elastic.CThe price elasticity of supply of S1 is inelastic and S2 is unit elastic.DThe price elasticity of supply is unit elastic at every point along both S1 and S2.

Cross-board concept practice · originally a CIE 9708 question, used here because the concept is the same. It is not IB Economics past-paper material.

Question 3

The diagram shows the supply curve for bananas. What is the price elasticity of supply when there is a rise in price from $5 to $6?

A–2.5B+0.4C+2D+2.5

More questions from across Unit 2 →

What this practice covers

Real questions, the answer key from the mark scheme, and the explanation that goes with it. Each one is marked the moment you pick, the correct option is shown whether or not you found it, and the full explanation opens either way. No account needed to answer them.

These questions are drawn from past Cambridge papers, mapped across to this topic because the concept is the same. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.

Practice is free. You need an account only so your progress and your mistakes are still there next time.

Keep going concept drills →

What examiners see students get wrong here

These are the errors that cost marks on elasticity of supply (pes), taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.

• Giving PES a negative sign. It is normally positive, because supply slopes upward.
• Confusing PES with PED, or applying the "total revenue test" to PES, that test belongs to PED.
• Ignoring the time period. "Supply is inelastic" is incomplete without saying over what horizon.
• Judging elasticity from the steepness of a straight-line supply curve rather than from where it cuts an axis.
• Treating spare capacity and stocks as the same thing. Capacity is about the ability to produce more; stocks are about releasing what already exists.
• Calculating PES correctly and never interpreting it.
• Saying primary products have inelastic supply without explaining why (fixed land, long production periods, weather).
• Presenting buffer stocks as straightforwardly effective.

Revise it first

If any of the above is unfamiliar, work through the notes before practising: Elasticity of Supply (PES) revision notes.