PED & PES

Question 1

Factors influencing PED analogy

Answer 1

NASBIT
Necessity
Addictive/habit forming
Substitutes
Branding
Income/proportion of income
Time

Question 2

Factors influencing PES analogy

Answer 2

TEASS
Time
Economy state
Availability of factors of production
Stockpiles and perishability
Spare capacity

Question 3

Time on PES (short-run vs long-run)

Answer 3

Short run-at least one factor is fixed-hard to increase supply so inelastic
Long run-all factors variable so elastic

Question 4

Economy state on PES

Answer 4

Bad state-elastic-factors of production more available e.g labour, land vacancies etc

Good state-occupied factors of production e.g harder to find labour, land vacancies etc

Question 5

Availability of factors of production on PES

Answer 5

Easy to find-elastic e.g sandwich maker needs ingredients, unskilled labour
Harder to find-inelastic e.g diamond rings need skilled labour, diamonds etc

Question 6

Stockpiling and perishability on PES

Answer 6

Easy to stockpile/not perishable-elastic e.g sharpeners, can easily hold supply so if price rises, can easily meet supply from storage

Hard to stockpile/perishable-inelastic e.g cheese, cannot hold for long so if price rises, cannot respond as takes ages to produce

Question 7

Spare capacity on PES

Answer 7

Spare capacity-easily increase supply-elastic