Gce Model Questions Vol1 2017 Economics Question 23

Practice objective / multiple choice question 23 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 23 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

The government imposes a specific tax of £2 per unit on a good. The market demand is \(Q_D = 500 - 5P\) and the supply (before tax) is \(Q_S = 3P\). (a) Find the price paid by consumers and the price received by producers after the tax is introduced. (b) Compute the total tax revenue. (c) Determine the dead‑weight loss caused by the tax.

Answer Options

A. Consumers pay £64.50, producers receive £62.50, tax revenue £375.00, dead‑weight loss £2.50
B. Consumers pay £62.00, producers receive £60.00, tax revenue £360.00, dead‑weight loss £5.00
C. Consumers pay £65.00, producers receive £63.00, tax revenue £390.00, dead‑weight loss £4.00
Correct Answer D. Consumers pay £63.25, producers receive £61.25, tax revenue £367.50, dead‑weight loss £3.75
Correct Answer
D
Correct Option:
Consumers pay £63.25, producers receive £61.25, tax revenue £367.50, dead‑weight loss £3.75

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 23. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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