O-LevelEconomicsThe allocation of resources2281/12 · May/June 2017 · Q101 Mark

The government increases the rate of income tax and decreases the rate of a sales tax (VAT). From the initial equilibrium point of X, which letter indicates the new equilibrium point in a market for normal goods? [Figure 10.1]

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✓ Correct answer

D: D

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2017 Paper 1 Variant 2, question 10.

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