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Economics (AS & A Level) · Oct / Nov 2022 · Paper 12 · Question 10

9708Consumer and producer surplus

A country has health care provided by the free market. This is replaced by the government provision of S_g free health care. [diagram: price/quantity graph with demand curve D, supply curve S, vertical supply curve S_g, price p, and regions labelled 1, 2, 3, 4, 5] What is the change in consumer surplus?

  1. Afrom 1 to (1 + 2)
  2. Bfrom 1 to (1 + 2 + 3 + 4)
  3. Cfrom (1 + 2) to (1 + 2 + 3)
  4. Dfrom (1 + 2) to (2 + 3 + 4 + 5)

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Correct answer: B. from 1 to (1 + 2 + 3 + 4)

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