Lithium is an essential metal for the production of electric cars. Following a 10% increase in the price of lithium, supplies increase by 15%. This led to a 5% increase in the price of electric cars. What is the price elasticity of supply (PES) for lithium?

A 0.33

B 0.66

C 1.50

D 2.0

The diagram shows market demand and supply curves.

To what extent is the market in disequilibrium at price P3?

A OQ1 – OQ2

B OQ1 – OQ3

C OQ2 – OQ4

D OQ3 – OQ5

The price of bread rose by 5% and the quantity demanded fell by 4%. What was the price elasticity of demand for bread?

A –0.4

B –0.8

C –1.25

D –2.0

The diagrams show the supply curve for an individual grower of tomatoes and for the total market supply of tomatoes.

What explains the similarity of the two curves?

A As costs rise growers need to get a higher price to increase output.

B At the lower prices each grower supplies more tomatoes.

C The profitability per unit is the same for all growers irrespective of output.

D Supply is not always influenced by price.

The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $10 to $12?

A 0.5

B 0.75

C 1.4

D 2.0