O-LevelEconomicsThe allocation of resources2281/11 · May/June 2020 · Q71 Mark

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?

A0.33

B0.66

C1.50

D2.0

✓ Correct answer

C: 1.50

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2020 Paper 1 Variant 1, question 7.

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