Waec Model Questions Vol1 2024 Economics Question 39

Practice objective / multiple choice question 39 from the 2024 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 39 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

Country X's import demand for a good is given by M = 500 - 5P, where P is the world price in dollars per unit. Initially the world price is $20. The government then imposes a specific tariff of $4 per unit. Assuming the domestic price rises to $24 and that the domestic supply of the good is perfectly elastic at the world price, determine: (a) the quantity of imports before and after the tariff, (b) the tariff revenue collected, and (c) the net welfare loss (dead‑weight loss) caused by the tariff.

Answer Options

Correct Answer A. Imports fall from 400 to 380 units; tariff revenue $1,520; dead‑weight loss $40
B. Imports fall from 400 to 360 units; tariff revenue $1,440; dead‑weight loss $80
C. Imports fall from 420 to 380 units; tariff revenue $1,520; dead‑weight loss $30
D. Imports fall from 400 to 390 units; tariff revenue $1,560; dead‑weight loss $20
Correct Answer
A
Correct Option:
Imports fall from 400 to 380 units; tariff revenue $1,520; dead‑weight loss $40

About This Question

This is Waec Model Questions Vol1 2024 Economics Question 39. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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