A-LevelEconomicsGovernment Intervention in MarketsOct/Nov 2015Paper 1 Q181 Mark
The diagram shows the market for onions in equilibrium at point X. The government has a stock of onions and wants to establish a new equilibrium at point Y. Which actions should the government take? [Figure 18.1]
AIt should buy an amount equal to XY and subsidise producers by a sum equal to YZ.
BIt should buy an amount equal to XY and tax producers by a sum equal to YZ.
CIt should sell an amount equal to XY and subsidise producers by a sum equal to YZ.
DIt should sell an amount equal to XY and tax producers by a sum equal to YZ.
✓ Correct Answer
The correct answer is A. This question tests the candidate's understanding of government intervention in markets within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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