Neco 2021 Economics Question 11

Practice objective / multiple choice question 11 from the 2021 Neco Economics examination.

Neco 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 11 NECO • 2021 • ECONOMICS • objective

The government imposes a specific tax of \(20\) Naira per unit on a good. The market demand is \(Q_d = 500 - 2P\) and the original supply (before tax) is \(Q_s = 100 + P\), where \(P\) is the price in Naira. Determine (i) the consumer price after the tax, (ii) the price received by producers, (iii) the tax revenue, and (iv) the dead‑weight loss caused by the tax.

Answer Options

A. Consumer price = 130 Naira, Producer price = 110 Naira, Tax revenue = 3,600 Naira, Dead‑weight loss = \frac{300}{3} Naira (≈100 Naira)
B. Consumer price = 150 Naira, Producer price = 130 Naira, Tax revenue = 5,000 Naira, Dead‑weight loss = \frac{500}{3} Naira (≈166.67 Naira)
Correct Answer C. Consumer price = 140 Naira, Producer price = 120 Naira, Tax revenue = 4,400 Naira, Dead‑weight loss = \frac{400}{3} Naira (≈133.33 Naira)
D. Consumer price = 145 Naira, Producer price = 125 Naira, Tax revenue = 4,800 Naira, Dead‑weight loss = \frac{450}{3} Naira (≈150 Naira)
Correct Answer
C
Correct Option:
Consumer price = 140 Naira, Producer price = 120 Naira, Tax revenue = 4,400 Naira, Dead‑weight loss = \frac{400}{3} Naira (≈133.33 Naira)

About This Question

This is Neco 2021 Economics Question 11. It is one of the objective questions from the 2021 Neco Economics examination.

Difficulty level: Medium .

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