中文（繁體）
中文（简体）
English
S5 Economics | Price Control and Quota Practice Paper 2 (Advanced)
S5 Economics | Price Control and Quota Practice Paper 2 (Advanced)
Move into quota economics: who collects the rent, how a tighter quota raises it, and full calculations of deadweight loss and total surplus.
Attempt first, mark afterwards Allow about thirty-five minutes; express surplus and deadweight loss as area formulae rather than bare numbers.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 items |
| Suggested time | About 35 minutes |
| Difficulty mix | Foundation 4 · Intermediate 3 · Challenge 2 · Error redo 1 |
| Chapter | Chapter: S5 Economics | Price Control and Quota |
| Level | S5 (Secondary 5) Economics |
02 Questions (10 items)
- FoundationWhat do a quota and a price ceiling have in common?
- FoundationUnder a quota, which curve normally sets the transaction price?
- FoundationWith a 60-unit quota in market A, what is the quota rent per unit?
- FoundationWho ends up with the quota rent?
- IntermediateIf the quota tightens to 50 units in market A, what is the total quota rent?
- IntermediateWhat deadweight loss does the 50-unit quota cause?
- IntermediateWith no control at all, what is total surplus in market A?
- ChallengeUnder the 15 price ceiling, what does producer surplus fall to?
- ChallengeBy what percentage does the 15 price ceiling cut total surplus relative to the free market?
- Error redoError drill: a student says quota rent is government tax revenue. What is wrong?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | Both push the quantity traded below the equilibrium quantity, so the traded price departs from equilibrium | A ceiling limits price and a quota limits quantity, but both end with less being traded. |
| 2 | The demand curve sets what buyers pay, while sellers receive the price on the supply curve | With quantity capped, the price is set by what buyers are willing to pay. |
| 3 | 15 | Demand price 30 minus supply price 15 gives 15. |
| 4 | Whoever holds the quota or licence; the government captures it only by auctioning or charging for quotas | Rent follows the property right: free licences leave it with holders, auctions leave it with the government. |
| 5 | 22 per unit, 1125 in total | Demand price 35 and supply price 12 differ by 22, times 50 gives 1125. |
| 6 | 337 | 0.5 × the 30 units not traded × the 22 price gap = 337. |
| 7 | 2400 | The demand intercept is 60 and supply starts at the origin, so 0.5 × 60 × 80 = 2400. |
| 8 | 450 | Producers receive 15 for 60 units, so 0.5 × 15 × 60 = 450. |
| 9 | About 6.25% | Deadweight loss 150 over the original 2400 gives 0.0625, that is 6.25 per cent. |
| 10 | Quota rent does not belong to the government by itself; free licences leave it with holders and only auctions or fees capture it | Rent is the gain from the price gap, and who gets it depends on how licences are allocated. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
Need a tutor for this chapter? Register hereTutor Registration →
Questions and answers are written originally by the TutorZone team and are not taken from any school, publisher or examination authority paper. Every value is checked by computer.