Waec Model Questions Vol1 2017 Economics Question 4

Practice objective / multiple choice question 4 from the 2017 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 4 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

The government imposes a specific tax of ₦200 per unit on a good. The price elasticity of demand for the good is -0.5 and the price elasticity of supply is 0.8. Before the tax, 5 000 units were sold each month. After the tax, quantity sold falls to 4 000 units. (a) What proportion of the tax is borne by consumers? (b) How much tax does a consumer pay per unit (in naira)? (c) Compute the dead‑weight loss arising from the tax.

Answer Options

Correct Answer A. Consumer bears 61.5% (≈₦123) per unit; DWL = ₦100,000
B. Consumer bears 55% (≈₦110) per unit; DWL = ₦90,000
C. Consumer bears 50% (≈₦100) per unit; DWL = ₦80,000
D. Consumer bears 70% (≈₦140) per unit; DWL = ₦120,000
Correct Answer
A
Correct Option:
Consumer bears 61.5% (≈₦123) per unit; DWL = ₦100,000

About This Question

This is Waec Model Questions Vol1 2017 Economics Question 4. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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