Year :
2015
Title :
Economics
Exam :
WASSCE/WAEC MAY/JUNE
Paper 1 | Objectives
11 - 20 of 48 Questions
| # | Question | Ans |
|---|---|---|
| 11. |
If a given change in price brings a proportionately larger change in quantity demanded, the A. demand is relatively price elastic B. demand is relatively price inelastic C. price elasticity of demand is unitary D. price elasticity of demand is constant Detailed SolutionPrice elasticity is a measure of the responsiveness of demand or supply of a good or service to changes in price. The price elasticity of demand measures the ratio of the proportionate change in quantity demanded to the proportionate change of theprice . |
|
| 12. |
Government revenue will increase if taxes are levied on goods with? A. perfectly elastic demand B. fairly elastic demand C. perfectly inelastic demand D. unitary elastic demand Detailed SolutionA good with a perfectly inelastic demand will always sell irrespective of the change in the price of the product. This is one way the government can increase revenue generation through taxation.An example of perfectly inelastic demand would be a lifesaving drug that people will pay any price to obtain |
|
| 13. |
If the price of a commodity Z falls and a consumer buys less of it, then commodity Z is a A. necessity B. good of ostentation C. normal good D. giffen good Detailed SolutionAn ostentatious Good is a good where demand is often greater when the price of it is higher. These are goods we buy in order to 'keep up with the Jones'. The good may give little actual utility apart from the pride of owning something very few other people own. |
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| 14. |
In order to calculate total utility (TU) from given levels of marginal utility (MU), one has to? A. subtract MU from TU B. Add MU from the various levels C. multiply MU by the initial TU D. Divide current MU by previous MU Detailed Solution“Marginal utility is addition made to total utility by consuming one more unit of a commodity”.Total Utility is Summation of Marginal Utilities: in order to get the total utility, you will have to sum up the additional/extra utility (MU) from the given levels of consumption |
|
| 15. |
Which of the following will not affect the market price of a commodity A. increase in demand B. change in taste C. intersection of demand and supply D. increase in supply Detailed Solution6 Factors Affecting Price Determination of... |
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| 16. |
All the following are methods of determing prices except? A. maximum pricing B. rationing C. minimum pricing D. auctioning Detailed SolutionA maximum price occurs when a government sets a legal limit on the price of a good or service – with the aim of reducing prices below the market equilibrium price.Minimum Prices. It is known as minimum price or pricefloor when the government sets a minimum legal limit of aprice of a particular good or service. In economics, rationing refers to an artificial control of the supply and demand of commodities. |
|
| 17. |
The law of diminishing marginal returns relate to? A. total utility B. average utility C. total product D. marginal utility Detailed SolutionMarginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. As a consumer consumes more units of a product, the marginal utility derived eventually drops. This relates with the law of diminishing marginal returns which states that, there will be a decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant. |
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| 18. |
Total cost is obtain by? A. adding up the marginal cost at each level B. dividing the total cost of output at each level C. adding up the average variable cost at each level D. adding up the total variable cost and total fixed cost Detailed SolutionTotal cost refers to the total expense incurred in reaching a particular level of output. TC (total cost) = TFC (total fixed cost) + TVC (total variablecost). |
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| 19. |
By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to A. average product B. total product C. average variable cost D. total cost Detailed SolutionTotal product is the overall quantity of output that a firm produces, usually specified in relation to a variable input. Total product is the starting point for the analysis of short-run production. It indicates how much output a firm can produce according to the law of diminishing marginal returns.Marginal Product (MP) = Change in Total Product / Change in Variable Factor Total Product (TP) = AP X Variable Factor |
|
| 20. |
Which of the following curves is not U shaped A. marginal cost curve B. average fixed cost curve C. average total cost curve D. average variable cost Detailed SolutionThe average fixed costs AFC curve is downward slopingbecause fixed costs are distributed over a larger volume when the quantity produced increases. AFC is equal to the vertical difference between ATC and AVC. Variable returns to scale explains why the other cost curves are U-shaped. |
| 11. |
If a given change in price brings a proportionately larger change in quantity demanded, the A. demand is relatively price elastic B. demand is relatively price inelastic C. price elasticity of demand is unitary D. price elasticity of demand is constant Detailed SolutionPrice elasticity is a measure of the responsiveness of demand or supply of a good or service to changes in price. The price elasticity of demand measures the ratio of the proportionate change in quantity demanded to the proportionate change of theprice . |
|
| 12. |
Government revenue will increase if taxes are levied on goods with? A. perfectly elastic demand B. fairly elastic demand C. perfectly inelastic demand D. unitary elastic demand Detailed SolutionA good with a perfectly inelastic demand will always sell irrespective of the change in the price of the product. This is one way the government can increase revenue generation through taxation.An example of perfectly inelastic demand would be a lifesaving drug that people will pay any price to obtain |
|
| 13. |
If the price of a commodity Z falls and a consumer buys less of it, then commodity Z is a A. necessity B. good of ostentation C. normal good D. giffen good Detailed SolutionAn ostentatious Good is a good where demand is often greater when the price of it is higher. These are goods we buy in order to 'keep up with the Jones'. The good may give little actual utility apart from the pride of owning something very few other people own. |
|
| 14. |
In order to calculate total utility (TU) from given levels of marginal utility (MU), one has to? A. subtract MU from TU B. Add MU from the various levels C. multiply MU by the initial TU D. Divide current MU by previous MU Detailed Solution“Marginal utility is addition made to total utility by consuming one more unit of a commodity”.Total Utility is Summation of Marginal Utilities: in order to get the total utility, you will have to sum up the additional/extra utility (MU) from the given levels of consumption |
|
| 15. |
Which of the following will not affect the market price of a commodity A. increase in demand B. change in taste C. intersection of demand and supply D. increase in supply Detailed Solution6 Factors Affecting Price Determination of... |
| 16. |
All the following are methods of determing prices except? A. maximum pricing B. rationing C. minimum pricing D. auctioning Detailed SolutionA maximum price occurs when a government sets a legal limit on the price of a good or service – with the aim of reducing prices below the market equilibrium price.Minimum Prices. It is known as minimum price or pricefloor when the government sets a minimum legal limit of aprice of a particular good or service. In economics, rationing refers to an artificial control of the supply and demand of commodities. |
|
| 17. |
The law of diminishing marginal returns relate to? A. total utility B. average utility C. total product D. marginal utility Detailed SolutionMarginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. As a consumer consumes more units of a product, the marginal utility derived eventually drops. This relates with the law of diminishing marginal returns which states that, there will be a decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant. |
|
| 18. |
Total cost is obtain by? A. adding up the marginal cost at each level B. dividing the total cost of output at each level C. adding up the average variable cost at each level D. adding up the total variable cost and total fixed cost Detailed SolutionTotal cost refers to the total expense incurred in reaching a particular level of output. TC (total cost) = TFC (total fixed cost) + TVC (total variablecost). |
|
| 19. |
By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to A. average product B. total product C. average variable cost D. total cost Detailed SolutionTotal product is the overall quantity of output that a firm produces, usually specified in relation to a variable input. Total product is the starting point for the analysis of short-run production. It indicates how much output a firm can produce according to the law of diminishing marginal returns.Marginal Product (MP) = Change in Total Product / Change in Variable Factor Total Product (TP) = AP X Variable Factor |
|
| 20. |
Which of the following curves is not U shaped A. marginal cost curve B. average fixed cost curve C. average total cost curve D. average variable cost Detailed SolutionThe average fixed costs AFC curve is downward slopingbecause fixed costs are distributed over a larger volume when the quantity produced increases. AFC is equal to the vertical difference between ATC and AVC. Variable returns to scale explains why the other cost curves are U-shaped. |