Question 10
[Maximum number: 1]
Which type of good is most suitable for a successful buffer stock scheme?
easy to produce
cheap to store
perishable
yes
yes
yes
yes
no
no
no
yes
no
no
no
yes
CAIE A-Level Economics 3.2.5 Buffer Stock Schemes
Practise reading buffer-stock price bands, calculating government purchases or sales and evaluating whether storage, perishability, harvest variation and budgets permit stability.
How this is tested
- use the floor and ceiling to decide when government buys stock or releases it for sale
- calculate the quantity or expenditure required from demand, supply and supported prices
- evaluate viability through storage cost, perishability, harvest volatility and finite budgets