Economics (AS & A Level) · Feb / March 2025 · Paper 12 · Question 30
9708Protectionism
The diagram shows the impact of a government introducing an export subsidy for its domestic producers of oil. What will be the effect of this export subsidy on the operation of the domestic market?
- Adomestic output of oil will increase by 15 million units
- Bimports of oil will decrease by 25 million units
- Cthe domestic price of oil will decrease by $28
- Dthe domestic price of oil will increase by $8
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Correct answer: B. imports of oil will decrease by 25 million units
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