Edexcel International A Level Economics
Edexcel International A Level Economics Supply Exam Questions
Free Edexcel International A Level Economics exam questions for Supply, with a mark scheme for every pack. Covers the supply curve, factors causing shifts in supply, price elasticity of supply and its determinants.
Supply exam questions
1 question pack of real past exam questions, each with its mark scheme. Do not stop after a few: answer as many as you can without notes, then mark every answer with the mark scheme. The more questions you do, the more quickly you will spot how examiners ask about each idea.
About Edexcel International A Level Economics Supply
Supply is a Unit 1 topic in Edexcel International A Level Economics that mirrors the work you do on demand. You learn why supply curves slope upwards, which factors shift supply, and how to measure the responsiveness of supply to a price change using price elasticity of supply. These ideas are essential for price determination, for understanding the incidence of indirect taxes and subsidies, and for explaining price volatility in markets such as agriculture and commodities. Examiners commonly test PES calculations, the determinants of PES and the distinction between a movement along the supply curve and a shift of the curve.
What you need to know
- The supply curve Supply is the quantity producers are willing and able to sell at each price. It slopes upwards because higher prices increase potential profit and cover the rising marginal cost of extra output.
- Shifts in supply Factors include costs of production (wages, raw materials, energy), productivity, technology, indirect taxes, subsidies, the number of firms and weather conditions for agricultural goods.
- Price elasticity of supply PES = % change in quantity supplied / % change in price. PES is always positive; a value above 1 is elastic and below 1 is inelastic.
- Determinants of PES Spare capacity, stock levels, ease of switching factors of production, the length of the production period and the time period being considered. Supply is usually more elastic in the long run.
- Applications Inelastic short-run supply explains volatile agricultural prices. Supply of housing and land is often inelastic, so increases in demand mainly raise price.
Common mistakes in Supply
- Shifting the supply curve when the good's own price changes. A change in price causes an extension or contraction along the curve.
- Shifting supply right when costs rise. Higher costs shift supply left, meaning less is supplied at each price.
- Writing PES with the variables inverted. It is % change in quantity supplied divided by % change in price.
- Ignoring time when explaining PES. Always consider the short run versus the long run.
- Treating a vertical supply curve as elastic. A vertical supply curve has PES = 0 and is perfectly inelastic.
Try three Supply exam-style questions
1. The price of strawberries rises by 20% and the quantity supplied rises by 6%. Calculate the price elasticity of supply and interpret the answer. (3 marks)
Show the mark scheme answer
PES = 6 / 20 = 0.3; supply is price inelastic; quantity supplied responds less than proportionately to the price rise.
2. Explain two factors that cause the supply curve of smartphones to shift to the right. (4 marks)
Show the mark scheme answer
Improved technology lowers unit costs, so more is supplied at each price; fall in costs of components or labour; entry of new firms; a subsidy; two factors explained with the direction of shift.
3. Explain why the supply of agricultural products tends to be price inelastic in the short run. (4 marks)
Show the mark scheme answer
Long production period, since crops take months to grow; perishable goods are hard to store, so stocks are low; land and capital are fixed in the short run; farmers cannot quickly respond to higher prices.
Supply FAQs
What does Edexcel IAL Economics Supply cover?
It covers the supply curve, the factors that shift supply, price elasticity of supply and the determinants of PES.
Which unit is Supply examined in?
It is part of Unit 1, Markets in action.
What is the formula for price elasticity of supply?
PES = % change in quantity supplied divided by % change in price. It is positive, and values above 1 are elastic while values below 1 are inelastic.
