A-LevelEconomicsMarket FailureMay/June 2018Paper 1 Q151 Mark
The diagram shows the effect on the supply curve of a product when the government provides a subsidy. [Figure showing two upward sloping supply curves S1 and S2. S1 is above S2. The vertical distance between S1 and S2 is constant ($5) as quantity increases.] What can be concluded about the nature of the subsidy as the quantity supplied increases?
AIt is a falling percentage (%) of the price of each unit.
BIt is a fixed percentage (%) of the price of each unit.
CIt is a fixed sum on each unit.
DIt is a rising percentage (%) of the price of each unit.
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of market failure 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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