Post Utme Madonna University 2017 Economics Question 8

Practice objective / multiple choice question 8 from the 2017 Post Utme Madonna University Economics examination.

Post Utme Madonna University 2017 Economics Objective / Multiple Choice
Question 8 POST_UTME_MADONNA_UNIVERSITY • 2017 • ECONOMICS • objective

A government is considering a tax on a particular good. The tax will be levied on the producer, and the revenue generated will be used to fund a public good. Assuming the tax is levied at a rate of 10% of the producer's revenue, what will be the effect on the equilibrium price and quantity of the good?

Answer Options

Correct Answer A. The equilibrium price will increase, and the equilibrium quantity will decrease
B. The equilibrium price will decrease, and the equilibrium quantity will increase
C. The equilibrium price will remain unchanged, and the equilibrium quantity will increase
D. The equilibrium price will increase, and the equilibrium quantity will remain unchanged
Correct Answer
A
Correct Option:
The equilibrium price will increase, and the equilibrium quantity will decrease

About This Question

This is Post Utme Madonna University 2017 Economics Question 8. It is one of the objective questions from the 2017 Post Utme Madonna University Economics examination.

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