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Question 7 The diagram below shows the demand and supply curves for a good, where the initial equilibrium is at point x. The introducb'on of a subsidy resuits in a new equilibrium of point B. Price Question 9 The diagram below shows the demand and supply curves for a good, with the initial equilibrium at point E. Price S P E - D Q Quantity If the government decides to impose a tax on the good, which of the following will occur? The demand curve will shift to the left The price will fall There will be a movement along the demand curve There will be a rise in quantityQuestion 10 The diagram below shows a country's aggregate demand and supply schedules, with equilibrium at point E. Price Level LRAS E AD Real National Output Which of the following policies will be most likely to be pursued in the short run by a government faced with an initial equilibrium at point E? A Increased spending on education and training. B A subsidy granted to exporters. An increase in interest rates. D A cut in the budget deficit.Question 12 The diagram below shows the growth rate of an economy over time. Real GDP Actual GDP Trend GDP A Time If the economy is operating at point A, which combination of features is most likely to be occurring in the economy? A 1 Falling employment and falling consumption. B High investment and high level of imports. C A rising budget deficit and low unemployment. D Low demand for inferior goods and high consumption.Question 14 The following diagram shows the different cost and revenue curves faced by a firm. Costs and Revenue A B C D Output Which intersection of curves shows would identify the most productively efficient level of output for a firm? A Where A intersects D B Where A intersects C Where A intersects B D Where C intersects DQuestion 16 The diagram below shows the market for coal in the UK. Price per tonne of S coal P2 P1 D Q2 Q1 Quantity of coal (tonnes) The government recognises that coal production creates negative externalities in the form of carbon dioxide emissions. The government believes the socially optimum level of output is Q2. In order to reduce output to Q2, the government would be most likely to A ban coal production. B introduce a maximum price of P2. C introduce a subsidy to shift the demand curve for coal to the left. D impose a tax on coal producers that matches the size of the external cost to society.19 The following diagram shows the costs and revenues faced by a profit maximising monopolist. Costs / MC Revenue A B G LRAC C F MR D = AR D E Output Which of the following areas represents consumer surplus? A ABG B CBGF C JBGH D DBGE