CourseCourseConceptConceptDocsDocuments

CAIE A-Level Economics AS 2.4.4 Price Functions in Allocation Questions

Practise explaining rationing, signalling and incentive functions of price, and analysing how the price mechanism allocates scarce resources in different markets.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • Explain the rationing, signalling and incentive functions of price and analyse how the price mechanism allocates scarce resources.

CAIE A-Level Economics AS 2.4.4 Price Functions in Allocation Questions question 1

[Maximum number: 1]

In the diagram, the supply curve shows the number of spaces in a car park and the demand curves show the demand for spaces on four different days, D1,D2,D3\mathrm{D}_{1}, \mathrm{D}_{2}, \mathrm{D}_{3} and D4\mathrm{D}_{4}.

Figure for Question CAIE A-Level Economics AS 2.4.4 Price Functions in Allocation Questions question 1 — CAIE A-Level Economics AS

The owner wishes to charge a parking fee on each of these days to allocate the spaces according to the market mechanism.

Which pricing policy should the owner use?

A

set a fixed price at P1\mathrm{P}_{1}

B

set a fixed price at P4\mathrm{P}_{4}

C

vary prices between P2\mathrm{P}_{2} and P3\mathrm{P}_{3}

D

vary prices between P1\mathrm{P}_{1} and P4\mathrm{P}_{4}

All question bank results loaded