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Question 18N.3.HL.TZ0.2b.iii

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Date November 2018 Marks available [Maximum mark: 2] Reference code 18N.3.HL.TZ0.2b.iii
Level HL Paper 3 Time zone TZ0
Command term Calculate Question number b.iii Adapted from N/A
b.iii.
[Maximum mark: 2]
18N.3.HL.TZ0.2b.iii

Figure 3 illustrates the market for cotton in the country of San Marcus, a small closed economy. Cotton is used as an input in the San Marcus textile industry. Quantity is in thousands of kilograms (kg).

The Government of San Marcus decides to provide a subsidy equal to $8 per kilogram to its producers of cotton.

(b.iii)

Calculate the resulting change in producer surplus following the introduction of the subsidy to cotton producers in San Marcus.

[2]

Markscheme

( 50 + 75 ) 2 × ( 13 − 10 ) × 1000

OR
(0.5 × 75 × 9) − (0.5 × 50 × 6) = 337.5 − 150

Valid working may include:

  • correct workings for initial PS (0.5 × 50 × 6)
  • correct workings for final PS (0.5 × 75 × 9)
  • correct workings for the trapezium ( 50 + 75 ) 2 × ( 13 − 10 ) × 1000

Any valid working is sufficient for [1].

=$187 500

An answer of 187 500 or $187 500 (without working) is sufficient for [1].

OFR may apply.

Syllabus sections