Gce Model Questions Vol1 2020 Economics Question 18
Practice objective / multiple choice question 18 from the 2020 Gce Model Questions Vol1 Economics examination.
A small open economy has domestic demand \(Q_D = 200-2P\) and domestic supply \(Q_S = 20+P\). The world price of the good is £10. The government imposes an import quota that limits imports to 40 units and sells import licences at auction, capturing the quota rent.\n(a) Find the domestic price after the quota is imposed.\n(b) Calculate the total quota rent captured by the government.\n(c) Determine the changes in consumer surplus, producer surplus and government revenue.\n(d) What is the net welfare change for the economy?
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About This Question
This is Gce Model Questions Vol1 2020 Economics Question 18. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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