Post Utme Summit University 2022 Economics Question 31

Practice objective / multiple choice question 31 from the 2022 Post Utme Summit University Economics examination.

Post Utme Summit University 2022 Economics Objective / Multiple Choice
Question 31 POST_UTME_SUMMIT_UNIVERSITY • 2022 • ECONOMICS • objective

The government of Nigeria has introduced a new tax policy aimed at increa\sing revenue from the agricultural sector. The policy includes a 10% tax on all agricultural produce sold in the market. U\sing the concept of elasticity of demand, explain why the government's policy may not achieve its int\ended goal.

Answer Options

A. The policy will lead to a decrease in the quantity of agricultural produce sold, resulting in a decrease in revenue.
Correct Answer B. The policy will lead to an increase in the quantity of agricultural produce sold, resulting in an increase in revenue.
C. The policy will have no effect on the quantity of agricultural produce sold.
D. The policy will lead to a decrease in the price of agricultural produce, resulting in a decrease in revenue.
Correct Answer
B
Correct Option:
The policy will lead to an increase in the quantity of agricultural produce sold, resulting in an increase in revenue.

About This Question

This is Post Utme Summit University 2022 Economics Question 31. It is one of the objective questions from the 2022 Post Utme Summit University Economics examination.

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