Post Utme Futa 2024 Economics Question 16

Practice objective / multiple choice question 16 from the 2024 Post Utme Futa Economics examination.

Post Utme Futa 2024 Economics Objective / Multiple Choice
Question 16 POST_UTME_FUTA • 2024 • ECONOMICS • objective

A government imposes a tax on a commodity to reduce its consumption. However, the tax revenue is used to fund a program that increases the production of the same commodity. What is the opportunity \cost of this policy?

Answer Options

A. The reduction in consumption of the commodity
B. The increase in production of the commodity
Correct Answer C. The opportunity \cost is zero because the tax revenue is used to fund a program that increases the production of the commodity
D. The opportunity \cost is the difference between the tax revenue and the \cost of producing the commodity
Correct Answer
C
Correct Option:
The opportunity \cost is zero because the tax revenue is used to fund a program that increases the production of the commodity

About This Question

This is Post Utme Futa 2024 Economics Question 16. It is one of the objective questions from the 2024 Post Utme Futa Economics examination.

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