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Economics (AS & A Level) · May / June 2021 · Paper 11 · Question 9

9708Consumer and producer surplus

A government wishes to encourage young adults to buy their first home, by providing a subsidy to the builder. Which area on the diagram represents the size of the consumer surplus to those who buy a house with such a subsidy?

  1. AV + W + X
  2. BV + W + Z
  3. CW + X + Y
  4. DX + Y + Z

As printed in the paper

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Correct answer: B. V + W + Z

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