Neco Model Questions Vol1 2024 Economics Question 33

Practice objective / multiple choice question 33 from the 2024 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 33 NECO_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

World price of an imported good is ₦500 per unit. The government imposes a specific tariff of ₦100 per unit. Domestic demand is \(Q_d = 3000 - 3P\) and domestic supply is \(Q_s = 2P - 400\), where \(P\) is the domestic price (in naira). Calculate (a) the new equilibrium quantity of imports after the tariff, (b) the tariff revenue, and (c) the change in consumer surplus caused by the tariff.

Answer Options

A. Imports = 300 units; Tariff revenue = ₦30,000; Consumer surplus falls by ₦120,000
B. Imports = 350 units; Tariff revenue = ₦35,000; Consumer surplus falls by ₦140,000
Correct Answer C. Imports = 400 units; Tariff revenue = ₦40,000; Consumer surplus falls by ₦135,000
D. Imports = 500 units; Tariff revenue = ₦50,000; Consumer surplus falls by ₦150,000
Correct Answer
C
Correct Option:
Imports = 400 units; Tariff revenue = ₦40,000; Consumer surplus falls by ₦135,000

About This Question

This is Neco Model Questions Vol1 2024 Economics Question 33. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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