A-LevelEconomicsGovernment Microeconomic InterventionOct/Nov 2016Paper 1 Q131 Mark
A government imposes an indirect tax on a product with normal demand and supply curves. The tax raises $100 million. What effect will the tax have on the value of the combined consumer surplus and producer surplus?
AIt will be unaffected.
BIt will fall by less than $100 million.
CIt will fall by exactly $100 million.
DIt will fall by more than $100 million.
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The correct answer is D. This question tests the candidate's understanding of government microeconomic intervention within the Economicssyllabus. The examiner's mark scheme requires...
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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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