1. Explain how the price mechanism reallocates resources when there is a decrease in the supply of a good. 2. Explain the view that the best allocation of resources occurs when consumer surplus and producer surplus are maximized. 3. Explain two factors which could shift a firm's supply curve to the left. 4. Explain how the price mechanism reallocates resources when there is an increase in demand for a good or service. 5. Explain two factors that would lead to an increase in the demand for a product. 6. Explain the determinants of price elasticity of supply. [10 marks] 7. Explain the likely value of price elasticity of supply for primary commodities. Paper 1, full questions 1. a) Explain the possible effect on consumers and producers when a specific tax is imposed on cigarettes. [10 marks] b) Using real-world examples, evaluate the possible outcomes of imposing such a tax. [15 marks] 2. a) Explain why a government might grant a subsidy to producers of wheat. [10 marks] b) Using real-world examples, discuss the consequences of such a subsidy. [15 marks] 3. a) Explain the role of prices in allocating resources in an economy. [10 marks] b) Using real-world examples, discuss the consequences of the setting of a maximum price in a market