Economics, 2011, WASSCE/WAEC MAY/JUNE, Exam, Paper 1 | Objectives

Paper Info

Year :

2011

Title :

Economics

Exam :

WASSCE/WAEC MAY/JUNE

Paper 1 | Objectives

11 - 20 of 44 Questions

#	Question	Ans
11.	Price fixed above the equilibrium is to A. protect agricultural producers B. discourage agricultural producers C. lower the price of agricultural producers D. favour consumers Show Content Detailed Solution When prices are set above equilibrium, it means more suppliers or producers will be willing to sell their goods because of the high prices. This will invariably lead to a surplus of goods in the market resulting in excess supply. This is usually done to protect and encourage production, as producers will be willing to produce and supply to the markets in large quantities when the price is high.	A
12.	A consumer purchasing a commodity X will maximize his satisfaction if A. Px = MUx B. Px ≥ MUx C. Px > MUx D. Px < MUx Show Content Detailed Solution Utility is maximized When price is equal to marginal utility.	A
13.	When total utility is constant, it means marginal utility is A. increasing B. zero C. decreasing D. one Show Content Detailed Solution When total utility is constant, it means marginal utility is zero. Total utility is constant when it is at its maximum, then marginal utility will be Zero. It is based on the law of diminishing marginal utility which says 'as more and more units of a good are consumed, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall. Once the total utility is constant, marginal utility will be zero.	B
14.	A rational consumer is one who A. spends his income to maximize satisfaction B. is not influenced by advertisemment C. behaves in a particular way all the time D. knows the price of all goods and buys the cheapest Show Content Detailed Solution A rational consumer is considered to be that person who makes rational consumption decisions. In other words, the consumer who makes consumption decision by portioning his limited resources (income) to buying commodities that will give maximum satisfaction.	A
15.	Which of the following is not true about land? A. the supply is fixed B. land is mobile C. it is subject to diminishing returns D. land is heterogeneous Show Content Detailed Solution Land is not mobile because it can not be moved from one place to another, rather land is fixed.	B
16.	The type of production that involve the tapping and harnessing of natural resources is A. primary production B. secondary production C. tertiary production D. industrial production Show Content Detailed Solution Primary production: this involves acquiring raw materials from its natural source and habitat. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.	A
17.	Which of the following does not change in the short run? A. Variable cost B. marginal cost C. total cost D. fixed cost Show Content Detailed Solution The short run is a production phase where at least one factor of production is fixed. Fixed costs are expenditures that do not change based on the level of production, at least not in the short run. Whether you produce a lot or a little, the fixed costs are the same.	D
18.	The resource used in production are called A. variable inputs B. factors of production C. capital for production D. fixed inputs Show Content Detailed Solution Factors of production are the inputs needed for the creation of a good or service. They include land, labor, entrepreneurship, and capital.	B
19.	A firm will shut down in the long run if its earning is A. less than normal profit B. greater than normal profit C. equal to super normal profit D. less than super normal profit Show Content Detailed Solution The long run is a phase where all factors of production are variable and firms are able to adjust all costs. If its earnings are less than the normal profits, it will shut down. A firm should earn enough to cover its total cost per unit in order to remain in business.	A
20.	A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as A. perfect competition B. monopoly C. oligopoly D. imperfect competition Show Content Detailed Solution In order to maximize profits in a perfectly competitive market, firms set marginal revenue equal to marginal cost (MR=MC). MR is the slope of the revenue curve, which is also equal to the demand curve (D) and price	A

11.	Price fixed above the equilibrium is to A. protect agricultural producers B. discourage agricultural producers C. lower the price of agricultural producers D. favour consumers Show Content Detailed Solution When prices are set above equilibrium, it means more suppliers or producers will be willing to sell their goods because of the high prices. This will invariably lead to a surplus of goods in the market resulting in excess supply. This is usually done to protect and encourage production, as producers will be willing to produce and supply to the markets in large quantities when the price is high.	A
12.	A consumer purchasing a commodity X will maximize his satisfaction if A. Px = MUx B. Px ≥ MUx C. Px > MUx D. Px < MUx Show Content Detailed Solution Utility is maximized When price is equal to marginal utility.	A
13.	When total utility is constant, it means marginal utility is A. increasing B. zero C. decreasing D. one Show Content Detailed Solution When total utility is constant, it means marginal utility is zero. Total utility is constant when it is at its maximum, then marginal utility will be Zero. It is based on the law of diminishing marginal utility which says 'as more and more units of a good are consumed, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall. Once the total utility is constant, marginal utility will be zero.	B
14.	A rational consumer is one who A. spends his income to maximize satisfaction B. is not influenced by advertisemment C. behaves in a particular way all the time D. knows the price of all goods and buys the cheapest Show Content Detailed Solution A rational consumer is considered to be that person who makes rational consumption decisions. In other words, the consumer who makes consumption decision by portioning his limited resources (income) to buying commodities that will give maximum satisfaction.	A
15.	Which of the following is not true about land? A. the supply is fixed B. land is mobile C. it is subject to diminishing returns D. land is heterogeneous Show Content Detailed Solution Land is not mobile because it can not be moved from one place to another, rather land is fixed.	B

16.	The type of production that involve the tapping and harnessing of natural resources is A. primary production B. secondary production C. tertiary production D. industrial production Show Content Detailed Solution Primary production: this involves acquiring raw materials from its natural source and habitat. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.	A
17.	Which of the following does not change in the short run? A. Variable cost B. marginal cost C. total cost D. fixed cost Show Content Detailed Solution The short run is a production phase where at least one factor of production is fixed. Fixed costs are expenditures that do not change based on the level of production, at least not in the short run. Whether you produce a lot or a little, the fixed costs are the same.	D
18.	The resource used in production are called A. variable inputs B. factors of production C. capital for production D. fixed inputs Show Content Detailed Solution Factors of production are the inputs needed for the creation of a good or service. They include land, labor, entrepreneurship, and capital.	B
19.	A firm will shut down in the long run if its earning is A. less than normal profit B. greater than normal profit C. equal to super normal profit D. less than super normal profit Show Content Detailed Solution The long run is a phase where all factors of production are variable and firms are able to adjust all costs. If its earnings are less than the normal profits, it will shut down. A firm should earn enough to cover its total cost per unit in order to remain in business.	A
20.	A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as A. perfect competition B. monopoly C. oligopoly D. imperfect competition Show Content Detailed Solution In order to maximize profits in a perfectly competitive market, firms set marginal revenue equal to marginal cost (MR=MC). MR is the slope of the revenue curve, which is also equal to the demand curve (D) and price	A