DP Economics

Question 18N.3.HL.TZ0.b.iv

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

b.iv.

[Maximum mark: 2]

18N.3.HL.TZ0.b.iv

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.

Calculate the change in the consumer surplus resulting from the subsidy.

[2]

Markscheme

$\frac{{\left( {50 + 75} \right)}}{2} \times \left( {10 - 5} \right) + 1000$

OR

(0.5 × 75 × 15) − (0.5 × 50 × 10) = 562.5 − 250

Any valid working is sufficient for [1].

Valid working may be:

correct workings for initial CS (0.5 × 50 × 10)
correct workings for final CS (0.5 × 75 × 15)
correct workings for the trapezium $\frac{{\left( {50 + 75} \right)}}{2} \times \left( {10 - 5} \right) + 1000$