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7 marksMarket Equilibrium

CAPE Economics Unit 1 · 2013 · Paper 2 · Question 1(d)(i)

The government imposes a specific tax on each pint of ice cream sold to reduce obesity and raise revenue.

Referring to your graph in (c), explain how the increase in taxes will affect the market supply for ice cream.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 1(a)(i)Define demand.[2 marks]
  2. 1(a)(ii)Define supply.[2 marks]
  3. 1(a)(iii)Define equilibrium.[2 marks]
  4. 1(b)Copy and complete the table to show the market demand for ice cream.[2 marks]
  5. 1(c)Carefully draw and label a graph showing: (i) equilibrium (ii) equilibrium price (iii) equilibrium quantity.[6 marks]
  6. 1(d)(ii)State whether the government's objectives of reducing obesity and raising revenue have been achieved, justifying your answer.[4 marks]

More practice: the rest of this paper · more Market Equilibrium questions · all CAPE Economics Unit 1 past papers