A-LevelEconomicsThe price system and the microeconomy9708/12 · Oct/Nov 2018 · Q101 Mark
The diagram shows the market for cocoa, which is a normal good. Initially the market is in equilibrium with price Pe and quantity Qe bought and sold. [Diagram] Which sequence of events (event 1 followed by event 2) must have occurred in order to move to the new equilibrium at point X?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Aevent 1: a decline in popularity of cocoa, event 2: the removal of a subsidy previously paid to cocoa producers
Bevent 1: a decrease in disposable income, event 2: a decrease in costs of producing cocoa
Cevent 1: an increase in disposable income, event 2: an increase in the number of cocoa producers
Devent 1: a successful advertising campaign by cocoa producers, event 2: an increase in the taxation of cocoa
✓ Correct answer
D: event 1: a successful advertising campaign by cocoa producers, event 2: an increase in the taxation of cocoa
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill The price system and the microeconomy and see which topics are most likely to come up next.
Sign up free →