Post Utme Crawford University 2021 Economics Question 11

Practice objective / multiple choice question 11 from the 2021 Post Utme Crawford University Economics examination.

Post Utme Crawford University 2021 Economics Objective / Multiple Choice
Question 11 POST_UTME_CRAWFORD_UNIVERSITY • 2021 • ECONOMICS • objective

A government imposes a tax on imports to reduce the trade deficit. However, the tax also increases the \cost of production for domestic firms. U\sing the concept of supply and demand, explain how the tax affects the equilibrium price and quantity of the good.

Answer Options

Correct Answer A. The tax increases the equilibrium price and decreases the equilibrium quantity.
B. The tax decreases the equilibrium price and increases the equilibrium quantity.
C. The tax has no effect on the equilibrium price and quantity.
D. The tax increases the equilibrium price and increases the equilibrium quantity.
Correct Answer
A
Correct Option:
The tax increases the equilibrium price and decreases the equilibrium quantity.

About This Question

This is Post Utme Crawford University 2021 Economics Question 11. It is one of the objective questions from the 2021 Post Utme Crawford University Economics examination.

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