A-LevelEconomicsThe price system and the microeconomy9708/33 · May/June 2018 · Q51 Mark

The diagram shows a consumer's initial budget line is GH and a set of indifference curves IC₁, IC2 and IC3 for goods R and S. The original equilibrium for the consumer is point X. The inflation rate is rising faster than money incomes. What will be the most likely new equilibrium for the consumer if income is spent? [Figure 5.1]

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Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, May/June 2018 Paper 3 Variant 3, question 5.

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