2026-W33
Supply‑shift confusion: taxes, subsidies and cost changes in Microeconomics (Unit 2.2)
This week’s quizzes show students are strong on basic demand shifts but struggle with supply shifts caused by taxes, subsidies and cost changes—especially in diagram questions that combine multiple effects.
Published August 23, 2026
Total quiz attempts
73
Unique students
14
Average score
77.7%
Overall question accuracy
74.3%
Average question time
95.9 s
1. Weekly Overview
Supply-shift mechanics are the main weakness; demand intuition remains solid.
Aggregate quiz data (73 attempts from 14 students) shows high accuracy on straightforward demand questions but repeated errors on supply-related items in Microeconomics unit 2.2—particularly effects of subsidies, indirect taxes and changes in production costs, and combined-diagram questions that require sequencing multiple shifts.
Student takeaway: Focus revision on how taxes, subsidies and cost changes shift supply curves and practice combined supply–demand diagrams.
2. Key Patterns
Main Insights
Lowest accuracy is on supply effects of subsidies and cost changes
Several high-attempt items in unit 2.2 had low correct rates (example: subsidy effect question correct rate ≈ 34.8% with 23 attempts; wage-cost question had 0% correct over 8 attempts), indicating systematic misunderstanding of how producer-side policies and cost changes shift supply.
Advice: Review the definition of supply shifts vs movements along the curve, then practice 5–10 supply-shift diagrams: indirect taxes, production subsidies, and input cost changes.
Students perform well on demand-shift reasoning
Perfect scores on multiple demand items (e.g., income increase and substitute/complement combined-change questions each had 100% correctness) show strong intuition about demand-side movements.
Advice: Keep practicing comparative-static reasoning on demand (income, substitutes, complements) but allocate more time to supply-side practice.
Complex diagram questions cause long deliberation and mixed accuracy
Combined-diagram and macro AD/AS questions show very long average times (several > 20,000 ms and some extreme outliers > 1,000,000 ms) and variable accuracy — suggesting students either invest extra time because they find these multi-step diagrams hard or they leave and return to the question.
Advice: Practice sequencing: write down the direction and reason for each shift before drawing; time one-minute sketches to build fluency for exam timing.
3. Revision Plan
Priority Areas
Supply shifts (taxes, subsidies, input cost changes) · 2.2
Lowest correct rates on multiple high-attempt supply questions.
Action: Do 8–12 diagram exercises: show each policy or cost change alone, then combine with a demand shock; annotate direction and rationale for each shift.
Combined supply-and-demand diagrams · 2.2
Mixed accuracy and long times on multi-effect diagram questions.
Action: Practice sequencing: list effects (e.g., subsidy → supply right; expectation → supply/demand) before drawing; time 5 one-minute sketches and 5 five-minute full answers.
Cost changes and firm supply decisions (wages, input prices) · 2.2
Items about wage increases and factory costs showed very low correct rates.
Action: Work through examples linking input cost changes to short-run supply changes and market outcomes using concrete firm-level scenarios.
AD/AS diagram familiarity · 3.2 / 3.5
Some macro AD/AS items had long times but high correctness—practice will improve speed.
Action: Sketch the AD–SRAS–LRAS framework for common shocks (interest rates, currency depreciation, infrastructure) and write one-line reasons for each shift.
4. Question Evidence
Featured Questions
Most Wrong Questions
| Question | Topic | Unit | Attempts | Correct | Wrong | Avg Time |
|---|---|---|---|---|---|---|
| What are the effects on demand and supply from a government subsidy? | Microeconomics | 2.2 | 23 | 34.8% | 65.2% | 41.7 s |
| If the wage rate for factory workers increases significantly, what happens to the market supply of laptops? (Assume laptops are made in factories) | Microeconomics | 2.2 | 8 | 0.0% | 100.0% | 22.2 s |
| The government introduces a higher indirect tax on sugary drinks. What happens to the market supply of sugary drinks? | Microeconomics | 2.2 | 16 | 50.0% | 50.0% | 40.1 s |
| In a single diagram for streaming subscriptions, show the effects of a major cost-saving AI recommendation system and negative media coverage that makes some users cancel their subscriptions. | Microeconomics | 2.2 | 16 | 50.0% | 50.0% | 1.2 min |
| In a single diagram for solar panels, show the effects of a government production subsidy and rising expectations that future electricity prices will be much higher. | Microeconomics | 2.2 | 23 | 65.2% | 34.8% | 45.0 s |
Most Correct Questions
| Question | Topic | Unit | Attempts | Correct | Wrong | Avg Time |
|---|---|---|---|---|---|---|
| Laptops and tablets are substitutes, while laptops and laptop cases are complements. A large fall in the price of tablets occurs at the same time as a small fall in the price of laptop cases. If the substitution effect from tablets is stronger than the complement effect from cheaper laptop cases, what happens to the demand for laptops? | Microeconomics | 2.1 | 15 | 100.0% | 0.0% | 38.6 s |
| What happens to the demand curve when consumer income increases? | Microeconomics | 2.1 | 15 | 100.0% | 0.0% | 11.2 s |
| The government introduces a new subsidy for producers of solar panels. What happens to the market supply of solar panels? | Microeconomics | 2.2 | 15 | 100.0% | 0.0% | 16.1 s |
| In a single diagram for solar panels, show the effects of a government production subsidy and rising expectations that future electricity prices will be much higher. | Microeconomics | 2.2 | 23 | 65.2% | 34.8% | 45.0 s |
| In the short run, what is the effect on aggregate demand when central banks significantly lower interest rates, making it cheaper for firms to borrow and invest in new machinery? | Macroeconomics | 3.2 | 8 | 100.0% | 0.0% | 15.8 s |
Most Time Spent Questions
| Question | Topic | Unit | Attempts | Correct | Wrong | Avg Time |
|---|---|---|---|---|---|---|
| A government launches a long-term infrastructure plan, building new highways, ports and digital networks that permanently expand the economy’s productive capacity. In the standard macroeconomic diagram with AD, SRAS and LRAS, which curve is most likely to shift and in which direction? | Macroeconomics | 3.2 | 5 | 20.0% | 80.0% | 170.9 min |
| A student says: “When demand for concert tickets increases, firms will increase their supply, so prices will fall back down.” Using a demand and supply diagram, what actually happens when demand for concert tickets rises? | Microeconomics | 2.1 | 8 | 100.0% | 0.0% | 2.3 min |
| Which concept is associated with Karl Marx's critique of capitalism? | Introduction to Economics | 1.2 | 3 | 0.0% | 100.0% | 2.2 min |
| The US Federal Reserve (Fed) sharply raises interest rates to reduce inflation that is well above target. In the AD–SRAS framework, which curve is primarily affected in the short run, and how does it move? | Macroeconomics | 3.5 | 3 | 100.0% | 0.0% | 1.3 min |
| What happens to aggregate demand if the domestic currency depreciates sharply against major trading partners’ currencies? | Macroeconomics | 3.2 | 4 | 100.0% | 0.0% | 1.3 min |
5. Conclusion
Next steps for faster, more accurate diagrams
Prioritise short, focused practice on supply shifts (taxes, subsidies, input costs) and sequencing for combined diagrams; limit each practice sketch to 1–5 minutes and annotate reasons for each shift to improve speed and accuracy.
Note: This weekly report is automatically generated and may contain mistakes. Always double-check key points before using them for revision.
This report is based on anonymized, aggregated quiz activity for the week and does not identify individual students.