O-LevelEconomicsThe allocation of resources2281/12 · May/June 2022 · Q171 Mark

A government levies a specific tax on the supply of cigarettes. At the same time it starts a campaign to explain the health risks of smoking cigarettes. Which diagram illustrates the effects on the demand and supply of cigarettes? [Figure]

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ASupply curve shifts left (S1 to S2), Demand curve remains D.

BSupply curve shifts right (S1 to S2), Demand curve remains D.

CSupply curve shifts left (S1 to S2), Demand curve shifts left (D1 to D2).

DSupply curve shifts right (S1 to S2), Demand curve shifts left (D1 to D2).

✓ Correct answer

C: Supply curve shifts left (S1 to S2), Demand curve shifts left (D1 to D2).

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2022 Paper 1 Variant 2, question 17.

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