Answer Happy

Section A - True/False and explanation. You are recommended to apply graphs where are applicable. (60 marks) 1. A market-based policy in dealing with externalities generates a higher cost for our society than a command-and-control policy. 2. There is always a deadweight loss whether government imposes a unit tax or provides a per unit subsidy in a market. 3. Moving along the same PPF shows that the opportunity cost in producing agriculture goods is increasing. Therefore, we are gradually losing our comparative advantage in producing agriculture goods.