WAEC Economics 2020 Objective — Question 7
Question 7 of 50 from the West African Examinations Council (WAEC) Economics 2020 Objective paper, with the correct answer and a full explanation.
Advertisement
The curves D0D0 and S0S0 are the initial demand and supply curves respectively. What happens when government provides subsidy to producers?
- A. The supply curve will shift from S0S0 to S2S2
- B. The supply curve will shift from S0S0 to S1S1Correct
- C. The demand curve will shift from D0D0 to D1D1
- D. The supply curve will shift from S1S1 to S0S0
Explanation
A government subsidy to producers reduces their cost of production, increasing supply and shifting the supply curve rightward from S0S0 to S1S1.
Advertisement
Sign up free to unlock
- Score tracking
- Practice history
- Saved questions
- Progress dashboard
- Personalized sessions
- Weak-topic breakdown
…and/or go further with premium services and No Ads.