Economics 9708 · AS & A Level · Cross elasticity of demand

Cross elasticity of demand — practice question

A government aims to encourage young adults to purchase their first home by offering a subsidy to the builder. Which region on the diagram shows the magnitude of the consumer surplus for those who buy a house with this subsidy?

  • AV + W + X
  • BV + W + Z
  • CW + X + Y
  • DX + Y + Z

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