Gce Model Questions Vol1 2021 Economics Question 10
Practice objective / multiple choice question 10 from the 2021 Gce Model Questions Vol1 Economics examination.
In a wheat market, the demand function is \(Q_d = 5000 - 10P_c\) where \(P_c\) is the price paid by consumers, and the supply function is \(Q_s = 5P_f - 200\) where \(P_f\) is the price received by farmers. The government imposes a specific tax of \(t\) pounds per tonne on wheat, so that \(P_c = P_f + t\). The government wishes to raise exactly £20,000 in tax revenue.\n\n(a) Determine the value of the tax \(t\) (to two decimal places) that will achieve this revenue target.\n(b) Calculate the dead‑weight loss associated with this tax.
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About This Question
This is Gce Model Questions Vol1 2021 Economics Question 10. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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