Economics (AS & A Level) · May / June 2022 · Paper 13 · Question 14

The diagram shows the effect on the market for rice of a change in government policy that causes a shift in the supply curve from S1 to S2. What does the area JKLM represent?

1. Athe cost to the government of a subsidy to rice growers
2. Bthe extra saving to importers of the removal of a tariff on rice
3. Cthe increase in consumer surplus from the introduction of a maximum price for rice
4. Dthe loss in government revenue from the reduction in a lump sum tax on rice

As printed in the paper