O-LevelEconomicsThe allocation of resources2281/11 · May/June 2019 · Q181 Mark

The diagram shows the demand curve D₁ and supply curve S₁ for a good. The government introduces a subsidy to encourage production. What will be the total cost of the subsidy to the government? [Figure 18.1]

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A$40

B$50

C$100

D$150

✓ Correct answer

B: $50

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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 18.

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