Waec Model Questions Vol1 2022 Economics Question 48

Practice objective / multiple choice question 48 from the 2022 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2022 Economics Objective / Multiple Choice Hard Difficulty
Question 48 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

The demand for cassava is Q = 800 - 4P_c, where Q is quantity (tonnes) and P_c is the price paid by consumers (₦). The supply curve before tax is Q = 3P_p - 30, where P_p is the price received by producers. The government imposes a ₦10 per‑tonne tax on producers (so P_p = P_c - 10). (i) Determine the new equilibrium consumer price, producer price and quantity after the tax. (ii) Compare the change in consumer price with the change in producer price to state which group bears a larger share of the tax burden.

Answer Options

A. Equilibrium: P_c ≈ 130.00 ₦, P_p ≈ 120.00 ₦, Q ≈ 300 tonnes. Consumers bear about 50 % of the tax (price rise ≈ 5.00 ₦) and producers bear about 50 % (price fall ≈ 5.00 ₦).
B. Equilibrium: P_c ≈ 115.00 ₦, P_p ≈ 105.00 ₦, Q ≈ 315 tonnes. Consumers bear about 35 % of the tax (price rise ≈ 3.50 ₦) and producers bear about 65 % (price fall ≈ 6.50 ₦).
C. Equilibrium: P_c ≈ 120.00 ₦, P_p ≈ 110.00 ₦, Q ≈ 320 tonnes. Consumers bear about 40 % of the tax (price rise ≈ 4.00 ₦) and producers bear about 60 % (price fall ≈ 6.00 ₦).
Correct Answer D. Equilibrium: P_c ≈ 122.86 ₦, P_p ≈ 112.86 ₦, Q ≈ 309 tonnes. Consumers bear about 43 % of the tax (price rise ≈ 4.29 ₦) and producers bear about 57 % (price fall ≈ 5.71 ₦).
Correct Answer
D
Correct Option:
Equilibrium: P_c ≈ 122.86 ₦, P_p ≈ 112.86 ₦, Q ≈ 309 tonnes. Consumers bear about 43 % of the tax (price rise ≈ 4.29 ₦) and producers bear about 57 % (price fall ≈ 5.71 ₦).

About This Question

This is Waec Model Questions Vol1 2022 Economics Question 48. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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