Waec Model Questions Vol1 2022 Economics Question 47

Practice objective / multiple choice question 47 from the 2022 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2022 Economics Objective / Multiple Choice Hard Difficulty
Question 47 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

A maize farmer faces fixed costs of ₦150,000 per season and a variable cost of ₦30,000 per tonne. The market price is ₦45,000 per tonne. The government will grant a per‑tonne subsidy S only if the farmer's profit after receiving the subsidy is at least 20 % higher than the profit without the subsidy. (i) Find the minimum subsidy per tonne required. (ii) State the smallest output level (in tonnes) at which the farmer will accept the subsidy, assuming he will not produce if profit would be negative without the subsidy.

Answer Options

A. Minimum subsidy ≈ ₦300 per tonne; minimum output = 12 tonnes.
Correct Answer B. Minimum subsidy ≈ ₦273 per tonne; minimum output = 11 tonnes.
C. Minimum subsidy ≈ ₦250 per tonne; minimum output = 10 tonnes.
D. Minimum subsidy ≈ ₦220 per tonne; minimum output = 9 tonnes.
Correct Answer
B
Correct Option:
Minimum subsidy ≈ ₦273 per tonne; minimum output = 11 tonnes.

About This Question

This is Waec Model Questions Vol1 2022 Economics Question 47. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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