Post Utme Elizade University 2020 Economics Question 22

Practice objective / multiple choice question 22 from the 2020 Post Utme Elizade University Economics examination.

Post Utme Elizade University 2020 Economics Objective / Multiple Choice
Question 22 POST_UTME_ELIZADE_UNIVERSITY • 2020 • ECONOMICS • objective

A government may impose a tax on a good to reduce its consumption. However, this tax may also lead to a decrease in the supply of the good. Which of the following best describes the effect of this tax on the equilibrium price and quantity of the good?

Answer Options

A. The equilibrium price and quantity of the good increase
Correct Answer B. The equilibrium price of the good increases, but the quantity decreases
C. The equilibrium price of the good decreases, but the quantity increases
D. The equilibrium price and quantity of the good decrease
Correct Answer
B
Correct Option:
The equilibrium price of the good increases, but the quantity decreases

About This Question

This is Post Utme Elizade University 2020 Economics Question 22. It is one of the objective questions from the 2020 Post Utme Elizade University Economics examination.

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