Neco Model Questions Vol1 2022 Economics Question 42

Practice objective / multiple choice question 42 from the 2022 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2022 Economics Objective / Multiple Choice Medium Difficulty
Question 42 NECO_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

The market for wheat is described by demand \(P = 200 - 2Q\) and supply \(P = 20 + Q\), where \(P\) is price in \(\text{₦}\) and \(Q\) is quantity in thousand tonnes. The government imposes a specific tax of \(\text{₦}30\) per tonne on producers. Determine the consumer price, producer price, equilibrium quantity, total tax revenue and the dead‑weight loss caused by the tax.

Answer Options

A. Consumer price = ₦95, Producer price = ₦65, Quantity = 52 000 tonnes, Tax revenue = ₦1,560 000, Dead‑weight loss = ₦140 000
B. Consumer price = ₦105, Producer price = ₦75, Quantity = 48 000 tonnes, Tax revenue = ₦1,440 000, Dead‑weight loss = ₦160 000
Correct Answer C. Consumer price = ₦100, Producer price = ₦70, Quantity = 50 000 tonnes, Tax revenue = ₦1,500 000, Dead‑weight loss = ₦150 000
D. Consumer price = ₦110, Producer price = ₦80, Quantity = 45 000 tonnes, Tax revenue = ₦1,350 000, Dead‑weight loss = ₦180 000
Correct Answer
C
Correct Option:
Consumer price = ₦100, Producer price = ₦70, Quantity = 50 000 tonnes, Tax revenue = ₦1,500 000, Dead‑weight loss = ₦150 000

About This Question

This is Neco Model Questions Vol1 2022 Economics Question 42. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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