Post Utme Uniport 2024 Economics Question 26

Practice objective / multiple choice question 26 from the 2024 Post Utme Uniport Economics examination.

Post Utme Uniport 2024 Economics Objective / Multiple Choice
Question 26 POST_UTME_UNIPORT • 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 effect of this policy on the equilibrium price and quantity of the commodity in the market?

Answer Options

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

About This Question

This is Post Utme Uniport 2024 Economics Question 26. It is one of the objective questions from the 2024 Post Utme Uniport Economics examination.

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