Gce Model Questions Vol1 2022 Economics Question 22

Practice objective / multiple choice question 22 from the 2022 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2022 Economics Objective / Multiple Choice Medium Difficulty
Question 22 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

The government imposes a specific tax of \(\$2\) per unit on a good. The market demand is \(Q_D = 100 - 5P\) and the market supply (before tax) is \(Q_S = 20 + 3P\), where \(P\) is the price received by producers. Determine (a) the consumer price, (b) the producer price, (c) the tax revenue, and (d) the dead‑weight loss caused by the tax.

Answer Options

A. Consumer price = $12.00, Producer price = $10.00, Tax revenue = $120.0, Dead‑weight loss = $6.00
B. Consumer price = $11.00, Producer price = $9.00, Tax revenue = $100.0, Dead‑weight loss = $5.00
Correct Answer C. Consumer price = $10.75, Producer price = $8.75, Tax revenue = $92.5, Dead‑weight loss = $3.75
D. Consumer price = $10.50, Producer price = $8.50, Tax revenue = $85.0, Dead‑weight loss = $2.50
Correct Answer
C
Correct Option:
Consumer price = $10.75, Producer price = $8.75, Tax revenue = $92.5, Dead‑weight loss = $3.75

About This Question

This is Gce Model Questions Vol1 2022 Economics Question 22. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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