Gce Model Questions Vol1 2017 Economics Question 19

Practice objective / multiple choice question 19 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 19 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

The government imposes a specific tax of \(\$2\) per unit on a good. The market demand is \(Q_d = 100 - 5P\) and the supply (price received by producers) is \(Q_s = 20 + 3P\), where \(P\) is the price received by producers. Determine:\n(a) the price paid by consumers,\n(b) the price received by producers,\n(c) the total tax revenue, and\n(d) the dead‑weight loss caused by the tax.

Answer Options

A. Consumer price = \$10.75; Producer price = \$8.75; Tax revenue = \$92.5; Dead‑weight loss = \$5.00
Correct Answer B. Consumer price = \$10.75; Producer price = \$8.75; Tax revenue = \$92.5; Dead‑weight loss = \$3.75
C. Consumer price = \$10.00; Producer price = \$8.00; Tax revenue = \$80; Dead‑weight loss = \$2.50
D. Consumer price = \$11.00; Producer price = \$9.00; Tax revenue = \$100; Dead‑weight loss = \$5.00
Correct Answer
B
Correct Option:
Consumer price = \$10.75; Producer price = \$8.75; Tax revenue = \$92.5; Dead‑weight loss = \$3.75

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 19. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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