Waec Model Questions Vol1 2024 Economics Question 3

Practice essay / theory question 3 from the 2024 Waec Model Questions Vol1 Economics examination. This question covers Elasticity .

Waec Model Questions Vol1 2024 Economics Essay / Theory
Topic: Elasticity
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • essay

A market researcher collected data on the demand for a locally produced mango juice. The table shows the average price per litre (in Naira) and the corresponding average quantity demanded per week. | Price (₦ per litre) | Quantity demanded (litres per week) | |----------------------|--------------------------------------| | 200 | 800 | | 250 | 640 | | 300 | 520 | Using the information above, answer the following questions.

Question Parts

( a )
Calculate the price elasticity of demand between the price of ₦200 and ₦250 using the midpoint method. State whether demand is elastic, inelastic or unitary in this range.
( b )
Calculate the price elasticity of demand between ₦250 and ₦300 using the midpoint method. Compare this elasticity with that obtained in part (a) and explain what the change indicates about consumer responsiveness as price rises.
( c )
The government is considering imposing a tax that would raise the price of mango juice from ₦250 to ₦300 per litre. Based on your elasticity calculations, discuss the likely impact of the tax on total revenue for sellers and on consumer welfare.
( d )
If the income of consumers rises by 10 % and the quantity demanded of mango juice rises by 5 %, compute the income elasticity of demand and classify the good as normal or inferior, and as a necessity or luxury.

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About This Question

This is Waec Model Questions Vol1 2024 Economics Question 3. It is one of the essay questions from the 2024 Waec Model Questions Vol1 Economics examination.

The question covers Elasticity .

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