Gce Model Questions Vol1 2025 Economics Question 31

Practice objective / multiple choice question 31 from the 2025 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 31 GCE_MODEL_QUESTIONS_VOL1 • 2025 • 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 paid by consumers and \(Q\) is quantity. The government imposes a specific tax of \(t\) naira per unit on the good (paid by producers).\n\n(a) Determine the value of \(t\) that will generate a tax revenue of exactly ₦360.\n\n(b) Using this tax, calculate the dead‑weight loss (DWL) associated with the tax.

Answer Options

A. Tax per unit \(t \approx ₦5.00\); Dead‑weight loss \(\approx ₦30.0\)
B. Tax per unit \(t \approx ₦6.00\); Dead‑weight loss \(\approx ₦28.0\)
Correct Answer C. Tax per unit \(t \approx ₦6.39\); Dead‑weight loss \(\approx ₦24.5\)
D. Tax per unit \(t \approx ₦7.20\); Dead‑weight loss \(\approx ₦20.0\)
Correct Answer
C
Correct Option:
Tax per unit \(t \approx ₦6.39\); Dead‑weight loss \(\approx ₦24.5\)

About This Question

This is Gce Model Questions Vol1 2025 Economics Question 31. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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