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CAIE A-Level Economics AS 2.5 Consumer and Producer Surplus Questions

Practise reading surplus areas on demand and supply diagrams and explaining how prices, taxes and elasticity alter market welfare.

Syllabus
2026–2028
Course
Economics 9708
Level
AS

Exam points

  • identify consumer and producer surplus areas relative to demand, supply and market price lines
  • explain how taxes, subsidies, price controls or supply shifts change surplus areas
  • evaluate surplus changes using elasticity when judging whether producers or consumers gain

Covered syllabus points

2.5.1—Consumer surplus2.5.2—Producer surplus2.5.3—Surplus changes2.5.4—Elasticity and surplus changes

Question 1

[Maximum number: 1]

The diagram shows the market for computers in Pakistan.

Figure for Question 1 — CAIE A-Level Economics AS

Which areas represent consumer surplus and consumer expenditure?

consumer

surplus

consumer

expenditure

WXY

OXY

WXY

OXYZ

WYO

OXYZ

WYO

OYZ

Question 2

[Maximum number: 1]

Which statement correctly describes the area of producer surplus on a demand and supply diagram?

A

It is above the supply curve and below the equilibrium price line.

B

It is above the supply curve and below the demand curve.

C

It is below the demand curve and above the equilibrium price line.

D

It is below the supply curve and above the horizontal axis.

Question 3

[Maximum number: 1]

A country has health care provided by the free market. This is replaced by the government provision of Sg\mathrm{S}_{\mathrm{g}} free health care.

Figure for Question 3 — CAIE A-Level Economics AS

What is the change in consumer surplus?

A

from 1 to (1+2)

B

from 1 to (1+2+3+4)

C

from (1+2) to (1+2+3)

D

from (1+2) to (2+3+4+5)

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