Neco 2022 Economics Question 2

Practice objective / multiple choice question 2 from the 2022 Neco Economics examination.

Neco 2022 Economics Objective / Multiple Choice Hard Difficulty
Question 2 NECO • 2022 • ECONOMICS • objective

A farmer produces wheat and corn. The own‑price elasticity of demand for wheat is \( \varepsilon_{w} = -0.5 \). The cross‑price elasticity of demand of wheat with respect to the price of corn is \( \varepsilon_{wc} = 0.3 \). Initially, wheat sells for \( P_{w}=150 \) Naira per kg and the farmer sells \( Q_{w}=20{,}000 \) kg. The price of corn rises by \( 15\% \) while the price of wheat remains unchanged.\n\n(a) Calculate the percentage change in the quantity demanded of wheat.\n(b) Find the new quantity demanded of wheat.\n(c) Determine the new total revenue from wheat.

Answer Options

A. (a) 5.5% increase; (b) 21,100 kg; (c) 3,165,000 Naira
Correct Answer B. (a) 4.5% increase; (b) 20,900 kg; (c) 3,135,000 Naira
C. (a) 3.0% increase; (b) 20,600 kg; (c) 3,090,000 Naira
D. (a) 4.5% decrease; (b) 19,100 kg; (c) 2,865,000 Naira
Correct Answer
B
Correct Option:
(a) 4.5% increase; (b) 20,900 kg; (c) 3,135,000 Naira

About This Question

This is Neco 2022 Economics Question 2. It is one of the objective questions from the 2022 Neco Economics examination.

Difficulty level: Hard .

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