Gce Model Questions Vol1 2024 Economics Question 23

Practice objective / multiple choice question 23 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 23 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

The market for a good is described by the demand equation \( Q_d = 500 - 5P \) and the supply equation \( Q_s = 2P \). The government imposes a specific tax of \(\$10\) per unit on producers. Calculate the new equilibrium consumer price, producer price, quantity traded, total tax revenue and the dead‑weight loss caused by the tax.

Answer Options

A. Consumer price ≈ 80.00, Producer price ≈ 70.00, Quantity ≈ 120.00, Tax revenue ≈ 1,200.0, Dead‑weight loss ≈ 80.00
B. Consumer price ≈ 70.00, Producer price ≈ 60.00, Quantity ≈ 130.00, Tax revenue ≈ 1,300.0, Dead‑weight loss ≈ 65.00
C. Consumer price ≈ 75.00, Producer price ≈ 65.00, Quantity ≈ 125.00, Tax revenue ≈ 1,250.0, Dead‑weight loss ≈ 70.00
Correct Answer D. Consumer price ≈ 74.29, Producer price ≈ 64.29, Quantity ≈ 128.57, Tax revenue ≈ 1,285.7, Dead‑weight loss ≈ 71.43
Correct Answer
D
Correct Option:
Consumer price ≈ 74.29, Producer price ≈ 64.29, Quantity ≈ 128.57, Tax revenue ≈ 1,285.7, Dead‑weight loss ≈ 71.43

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 23. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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