Post Utme Unn 2018 Economics Question 36

Practice objective / multiple choice question 36 from the 2018 Post Utme Unn Economics examination.

Post Utme Unn 2018 Economics Objective / Multiple Choice
Question 36 POST_UTME_UNN • 2018 • ECONOMICS • objective

Consider a small open economy with a fixed exchange rate. The government imposes a tariff of 10% on imported goods. If the price elasticity of demand for the imported good is -2, what is the effect on the government's revenue from the tariff?

Answer Options

A. The government's revenue from the tariff increases by 20%
Correct Answer B. The government's revenue from the tariff decreases by 20%
C. The government's revenue from the tariff remains unchanged
D. The government's revenue from the tariff increases by 10%
Correct Answer
B
Correct Option:
The government's revenue from the tariff decreases by 20%

About This Question

This is Post Utme Unn 2018 Economics Question 36. It is one of the objective questions from the 2018 Post Utme Unn Economics examination.

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