A government increased a specific tax on shoes. The resulting increase in the price of shoes was paid mainly by the consumer and not by the producer. What must be true for this to happen?
✓ Correct Answer
The correct answer is A: The price elasticity of demand was less than the price elasticity of supply.
📋 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...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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