DP Economics

Test builder »

Question 19N.3.HL.TZ0.1f.i

Select a Test
Date November 2019 Marks available [Maximum mark: 1] Reference code 19N.3.HL.TZ0.1f.i
Level HL Paper 3 Time zone TZ0
Command term State Question number f.i Adapted from N/A
f.i.
[Maximum mark: 1]
19N.3.HL.TZ0.1f.i

The market for corn on the island of Nissos is perfectly competitive. The demand and supply for corn in Nissos are given by the functions

Qd=10-0.5P

Qs=-2+P

where Qd is the quantity of corn demanded per month in millions of kilograms (kg), Qs is the quantity of corn supplied per month in millions of kg and P is the price per kg of corn in dollars ($). 

Advisors to the government of Nissos suggest setting a price floor.

The monthly corn surplus created must be purchased by the government of Nissos.

(f.i)

State one measure that the government of Nissos might take to deal with this corn surplus, following the imposition of the price floor.

[1]

Markscheme

Award [1] for one accurate possible measure.

Measures may include:

  • destroying the surplus
  • storing for future use (possible future drought)
  • exporting abroad at a lower price
  • overseas food aid
  • purchasing the surplus
  • providing foodbanks or low-income families with (rationed) surplus
  • any other valid measure.

Syllabus sections