Gce Model Questions Vol1 2025 Economics Question 14

Practice objective / multiple choice question 14 from the 2025 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 14 GCE_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

The government imposes a specific tax of \(\$1\) per unit on a good whose demand and supply are given by \(Q_d = 200 - 20P\) and \(Q_s = 40 + 10P\) respectively, where \(P\) is the price paid by consumers. Calculate (a) the new equilibrium price paid by consumers, (b) the price received by producers, and (c) the dead‑weight loss caused by the tax.

Answer Options

Correct Answer A. Consumers pay £5.67, producers receive £4.67, dead‑weight loss ≈ £3.33
B. Consumers pay £5.67, producers receive £4.67, dead‑weight loss ≈ £4.50
C. Consumers pay £5.33, producers receive £4.33, dead‑weight loss ≈ £2.50
D. Consumers pay £6.00, producers receive £5.00, dead‑weight loss ≈ £4.00
Correct Answer
A
Correct Option:
Consumers pay £5.67, producers receive £4.67, dead‑weight loss ≈ £3.33

About This Question

This is Gce Model Questions Vol1 2025 Economics Question 14. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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