Gce Model Questions Vol1 2021 Economics Question 46

Practice objective / multiple choice question 46 from the 2021 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 46 GCE_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

The market for a good is described by the demand equation \( Q_d = 120 - 2P \) and the supply equation \( Q_s = -20 + 3P \), where \(P\) is the price in naira and \(Q\) is quantity. The government introduces a specific tax of ₦10 per unit sold. Calculate: (a) the price paid by consumers after the tax, (b) the price received by producers, (c) the total tax revenue, and (d) the proportion of the tax burden borne by consumers.

Answer Options

A. Consumers pay ₦30; producers receive ₦20; tax revenue = ₦400; consumer burden = 50 %
Correct Answer B. Consumers pay ₦34; producers receive ₦24; tax revenue = ₦520; consumer burden = 60 %
C. Consumers pay ₦32; producers receive ₦22; tax revenue = ₦480; consumer burden = 55 %
D. Consumers pay ₦36; producers receive ₦26; tax revenue = ₦560; consumer burden = 65 %
Correct Answer
B
Correct Option:
Consumers pay ₦34; producers receive ₦24; tax revenue = ₦520; consumer burden = 60 %

About This Question

This is Gce Model Questions Vol1 2021 Economics Question 46. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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