What this practice covers
These questions are drawn from past CIE 9708 papers and filtered to methods and effects of government intervention in markets. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising Paper 1 MCQs →
What examiners see students get wrong here
These are the errors that cost marks on methods and effects of government intervention in markets, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- A specific tax is a fixed amount per unit, not a percentage tax.
- The taxed supply curve shifts upward by the tax per unit.
- Consumers and producers can share a tax even when producers legally pay it.
- The less elastic side bears more of a tax.
- Government tax revenue uses post-tax quantity.
- A subsidy creates government expenditure, not revenue.
- Producers receive the consumer price plus the subsidy.
- The less elastic side receives more subsidy benefit.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Methods and Effects of Government Intervention in Markets revision notes.