Waec Model Questions Vol1 2017 Economics Question 40

Practice objective / multiple choice question 40 from the 2017 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2017 Economics Objective / Multiple Choice Easy Difficulty
Question 40 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

The demand for a good is given by $Q_d = 500 - 5P$ and the supply by $Q_s = 100 + 3P$, where $P$ is the price in Naira per unit. (a) Find the market equilibrium price and quantity. (b) The government imposes a specific tax of ₦20 per unit on producers. The supply curve shifts to $Q_s' = 100 + 3(P - 20)$. Determine the new equilibrium price paid by consumers and the new equilibrium quantity.

Answer Options

A. Equilibrium without tax: price ₦45, quantity 275 units. After ₦20 tax: consumer price ₦55, quantity 225 units.
B. Equilibrium without tax: price ₦50, quantity 250 units. After ₦20 tax: consumer price ₦60, quantity 200 units.
Correct Answer C. Equilibrium without tax: price ₦50, quantity 250 units. After ₦20 tax: consumer price ₦57.5, quantity 212.5 units.
D. Equilibrium without tax: price ₦55, quantity 225 units. After ₦20 tax: consumer price ₦62.5, quantity 187.5 units.
Correct Answer
C
Correct Option:
Equilibrium without tax: price ₦50, quantity 250 units. After ₦20 tax: consumer price ₦57.5, quantity 212.5 units.

About This Question

This is Waec Model Questions Vol1 2017 Economics Question 40. It is one of the objective questions from the 2017 Waec Model Questions Vol1 Economics examination.

Difficulty level: Easy .

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