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Government microeconomic intervention: taxes and subsidies
Practice Questions

20 CIE IGCSE Economics questions on Government microeconomic intervention: taxes and subsidies, each with instant feedback and a full examiner-style mark scheme.

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Try 2 sample questions on Government microeconomic intervention: taxes and subsidies

Question 1 · 1 mark · Difficulty 1/3

What is the main purpose of an indirect tax?

  1. To increase the quantity of goods supplied
  2. To raise government revenue and/or reduce consumption of certain goods
  3. To lower the market price for consumers
  4. To increase the profits of producers
Show answer & explanation
✓ Answer: B — To raise government revenue and/or reduce consumption of certain goods
Award 1 mark for identifying that indirect taxes raise government revenue and/or reduce consumption. A is incorrect — indirect taxes typically reduce quantity supplied at any given price. C is incorrect — indirect taxes raise, not lower, consumer prices. D is incorrect — indirect taxes reduce producer revenue per unit sold.
Question 2 · 1 mark · Difficulty 2/3

The government of Country X imposes a specific tax of $2 per unit on cigarettes. Before the tax, the equilibrium price was $8 and quantity was 100 million packs. After the tax, the price rises to $9.20 and quantity falls to 80 million packs. What is the incidence of the tax on consumers per pack?

  1. $0.80
  2. $1.20
  3. $2.00
  4. $9.20
Show answer & explanation
✓ Answer: B — $1.20
Award 1 mark for calculating consumer incidence as the rise in price paid: $9.20 – $8.00 = $1.20. A is incorrect — this is the producer incidence ($2.00 – $1.20 = $0.80). C is incorrect — this is the total tax, not the consumer's share. D is incorrect — this is the new market price, not the incidence.
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CIE IGCSE Economics: Government microeconomic intervention: taxes and subsidies FAQ

How many CIE IGCSE Economics questions on Government microeconomic intervention: taxes and subsidies are there on Kramizo?
Kramizo currently has 20 exam-board-aligned practice questions on Government microeconomic intervention: taxes and subsidies for CIE IGCSE Economics, with new questions added every week. Each question gives you instant feedback and a full examiner-style mark scheme that tells you exactly what would earn marks on a real CIE paper. The questions span the full difficulty range — from straightforward recall (level 1) right up to multi-step reasoning and evaluation (level 3) — so the bank works for first-pass revision and final exam-week stress testing alike.
Is Kramizo free for CIE IGCSE students preparing for Economics?
Yes — completely free. Every student gets 45 questions a day on the free plan, with no card required and no trial countdown. That free quota works across every subject and every topic in our bank, so you can mix Government microeconomic intervention: taxes and subsidies practice with other Economics topics or even switch to a totally different CIE subject without paying anything. Kramizo's optional Pro plan removes the daily cap and adds detailed progress analytics, but the free tier is the real product — used by thousands of GCSE, IGCSE and CSEC students.
Are the Government microeconomic intervention: taxes and subsidies questions aligned to the official CIE IGCSE Economics syllabus?
Every question is written against the published CIE IGCSE Economics specification, including the exact command words (state, describe, explain, calculate, evaluate, etc.), mark allocations, and difficulty tier you'd see on a real CIE paper. Explanations are written in the style of official examiner mark schemes — they tell you what is being awarded marks and why distractors are wrong, not just whether you got it right. The bank is continually refined to match the latest syllabus updates from CIE.
How is Government microeconomic intervention: taxes and subsidies typically tested on CIE IGCSE Economics papers?
Government microeconomic intervention: taxes and subsidies appears across multiple question types on real CIE IGCSE Economics papers — most commonly as multiple-choice questions in the objective section, structured short-answer questions in the main paper, and occasionally as part of an extended response. Kramizo's practice bank reflects that mix: 4-option MCQs, true/false statements, fill-in-the-blank key terms, multi-select questions, and ordering questions. Working through the bank gives you exposure to every question style examiners actually use.

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