Gce Model Questions Vol1 2023 Economics Question 2

Practice essay / theory question 2 from the 2023 Gce Model Questions Vol1 Economics examination. This question covers Demand, Supply, Equilibrium, Tax Incidence, Welfare Analysis .

Gce Model Questions Vol1 2023 Economics Essay / Theory
Topics: Demand Supply Equilibrium Tax Incidence Welfare Analysis
Question 2 GCE_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • essay

The table below shows the observed price (₦) together with the quantity demanded and quantity supplied of bottled water in a local market. | Price (₦) | Quantity Demanded (units) | Quantity Supplied (units) | |-----------|---------------------------|---------------------------| | 10 | 120 | 30 | | 20 | 80 | 60 | | 30 | 40 | 90 | Assume that both demand and supply are linear over this range.

Question Parts

( a )
Derive the linear demand and supply equations and calculate the market equilibrium price and quantity before any tax is imposed.
( b )
A per‑unit tax of ₦5 is now imposed on producers. (i) Write the new supply equation after the tax. (ii) Determine the new equilibrium price paid by consumers and the equilibrium quantity. (iii) Calculate the change in consumer surplus, producer surplus and the government’s tax revenue. (iv) Compute the dead‑weight loss and comment on its economic significance.

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About This Question

This is Gce Model Questions Vol1 2023 Economics Question 2. It is one of the essay questions from the 2023 Gce Model Questions Vol1 Economics examination.

The question covers Demand, Supply, Equilibrium, Tax Incidence, Welfare Analysis .

View More Gce Model Questions Vol1 2023 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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