O-LevelEconomicsThe allocation of resources2281/11 · May/June 2019 · Q61 Mark

A newspaper reported that 'The world market for coffee has returned to equilibrium'. Which situation supports this statement?

Asequence of poor harvests resulted in shortages.

BDecreased transport costs led to a surplus of supply.

CFarmers matched demand by planting more coffee bushes.

DThe price of coffee was fixed between producers.

✓ Correct answer

C: Farmers matched demand by planting more coffee bushes.

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2019 Paper 1 Variant 1, question 6.

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