A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2013 · Q161 Mark
A tax on a product is removed causing supply to increase from SS to S₁S₁ as s diagram. What effect does the move have on government tax revenue and consumer expenditure? [Figure 16.1 showing supply and demand curves with a tax removal]
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.
Areduce by $80 increase by $280
Breduce by $80 increase by $480
Creduce by $200 increase by $280
Dreduce by $200 increase by $480
✓ Correct answer
C: reduce by $200 increase by $280
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