Gce Model Questions Vol1 2020 Economics Question 39

Practice objective / multiple choice question 39 from the 2020 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2020 Economics Objective / Multiple Choice Medium Difficulty
Question 39 GCE_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • objective

Consider a market where the demand for a good is given by \( Q_d = 1000 - 2P \) and the pre‑tax supply is \( Q_s = -200 + 3P \), where \( P \) is the price in Naira and \( Q \) is quantity. The government imposes a specific tax of 50 Naira per unit on the good, which is levied on sellers. Determine:\n\na) the price paid by consumers after the tax,\nb) the price received by producers after the tax,\nc) the equilibrium quantity after the tax,\nd) the dead‑weight loss caused by the tax (in Naira).

Answer Options

A. Consumer price = 260 Naira; Producer price = 210 Naira; Quantity = 470 units; Dead‑weight loss = 1250 Naira
Correct Answer B. Consumer price = 270 Naira; Producer price = 220 Naira; Quantity = 460 units; Dead‑weight loss = 1500 Naira
C. Consumer price = 250 Naira; Producer price = 200 Naira; Quantity = 480 units; Dead‑weight loss = 1000 Naira
D. Consumer price = 280 Naira; Producer price = 230 Naira; Quantity = 450 units; Dead‑weight loss = 1600 Naira
Correct Answer
B
Correct Option:
Consumer price = 270 Naira; Producer price = 220 Naira; Quantity = 460 units; Dead‑weight loss = 1500 Naira

About This Question

This is Gce Model Questions Vol1 2020 Economics Question 39. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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