Neco Model Questions Vol1 2018 Economics Question 33

Practice objective / multiple choice question 33 from the 2018 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 33 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A per‑unit tax of ₦20 is imposed on a good whose demand and supply functions are \(Q_d = 500 - 5P\) and \(Q_s = 100 + 3P\) respectively, where \(P\) denotes the price received by producers. Determine (a) the price paid by consumers after the tax, (b) the price received by producers, (c) the tax revenue collected by the government, and (d) the dead‑weight loss resulting from the tax.

Answer Options

Correct Answer A. Consumer price = ₦57.5; Producer price = ₦37.5; Tax revenue = ₦4,250; Dead‑weight loss = ₦375
B. Consumer price = ₦58; Producer price = ₦38; Tax revenue = ₦4,600; Dead‑weight loss = ₦400
C. Consumer price = ₦55; Producer price = ₦35; Tax revenue = ₦3,500; Dead‑weight loss = ₦300
D. Consumer price = ₦60; Producer price = ₦40; Tax revenue = ₦4,800; Dead‑weight loss = ₦450
Correct Answer
A
Correct Option:
Consumer price = ₦57.5; Producer price = ₦37.5; Tax revenue = ₦4,250; Dead‑weight loss = ₦375

About This Question

This is Neco Model Questions Vol1 2018 Economics Question 33. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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