Q2 [updated] - Hkcee 2010 Econ Paper 2

HKCEE 2010 Econ Paper 2 Q2 Report

Graphical Implication: The government must either buy the surplus (10 tonnes) or restrict production to avoid waste. hkcee 2010 econ paper 2 q2

The correct answer for HKCEE 2010 Economics Paper 2 Question 2 is C. Question Summary HKCEE 2010 Econ Paper 2 Q2 Report Graphical

Answer:
For inelastic demand, price rise increases total revenue because the percentage drop in quantity is smaller than the percentage rise in price. Section 3: Part (b) – Specific Tax on

Section 3: Part (b) – Specific Tax on Producers

The Question (likely continuation)

(b) Suppose instead of a price ceiling, the government imposes a specific tax of $2 per unit on producers. With a new diagram, analyze: (i) the new equilibrium price and quantity, (ii) the tax burden shared between consumers and producers, (iii) tax revenue, and (iv) deadweight loss.

once paid; they do not change the value of the next best alternative (the rent you could receive) in the context of current decision-making. Incorrect Option (C): An increase in business profit reflects the return on your activity, not the value of the alternative you gave up. Further Exploration Access a comprehensive compilation of past answers from to verify year-by-year trends.