Economics, 2012, WASSCE/WAEC MAY/JUNE, Exam, Paper 1 | Objectives

Paper Info

Year :

2012

Title :

Economics

Exam :

WASSCE/WAEC MAY/JUNE

Paper 1 | Objectives

11 - 20 of 49 Questions

#	Question	Ans
11.	Any price below the equilibrium price will lead to A. increase in supply B. excess demand C. equality of demand and supply D. decreases in demand Show Content Detailed Solution Any price below the equilibrium price will lead to excess demand with decrease in supply. This is so because, people generally buy more of a commodity when the price is low while suppliers will want to supply more when the price is high. Hence, for a price set below equilibrium, suppliers will cut back on producing more of that commodity while demand will be high.	B
12.	The allocation of goods and services in a free market economy is performed by A. the price system B. the banking system C. the central planning body D. government budgets Show Content Detailed Solution In a free market economy, the price mechanism regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.	A
13.	Given the demand function Qd = 20 - ^1/ ₂P. What is Qd when P is $12? A. 6 units B. 10 nits C. 12 units D. 14 units	D
14.	If a particular consumer derives total utility of 22 utils having consumed 4 units of a given product, his average utility will be A. 88 utils B. 18 utils C. 5.5 utils D. 3.5 utils Show Content Detailed Solution Average utility will be the total utility derived form the consumption of a commodity divided by the number of units consumed. Thus we have; 22 ÷ 4 = 5.5 utils	C
15.	The law of diminishing marginal utility applies to a A. firm which minimizes cost B. consumer who maximizes satisfaction C. producer who maximizes marginal product D. consumer who minimizes total utility Show Content Detailed Solution The law of diminishing marginal utility states that the marginal utility of a good or service declines as its consumption increases. This means that, as a consumer keeps consuming additional units of a commodity, the additional satisfaction derived will keep decreasing (goods become less valuable as you continue consuming more of it)	B
16.	Why is the law of diminishing returns a short run phenomenon? A. all inputs are fixed B. all inputs are variable C. some outputs are variable D. some inputs are variable Show Content Detailed Solution The law of diminishing returns states that as an increasing amount of a variable factor is added to a fixed factor, the marginal product of the variable factor may at first rise but must eventually fall. The law of diminishing returns applies in the short run because only then is some factor fixed.	A
17.	Which of the following is capable of increasing the population of a country? A. increase in birth rate B. increase in death rate C. poor medical facilities D. decrease in birth rate Show Content Detailed Solution Birth rate is the proportion of births to the total population in a place in a given time. That is, the amount of babies born and alive in a given period of time. An increase in the birth rate would cause the population of that geographical area to increase.	A
18.	In the firm's production process, marginal cost A. falls continuously throughout B. falls and later rises C. remains unchanged throughout D. rises and later falls Show Content Detailed Solution Marginal cost is the cost additional cost incurred by producing one additional unit of a product or service. In the production process, the cost would usually rise and the fall in the long run when the firm starts enjoying economies of scale. That is, higher outputs, minimal cost	D
19.	If a firm's price is less than average cost but more than part of variable cost, the firm is covering A. all of its fixed cost and variable cost B. all of its fixed cost and part of variable cost C. all of its variable cost and part of fixed cost D. part of its fixed cost and part of varible cost	A
20.	An arrangement in which the debts of a company can only be paid from its own assets implies A. unlimited liability B. transferred liability C. limited liability D. capital liability Show Content Detailed Solution Limited liability is a kind of legal protection whereby owners and shareholders have no personal responsibility for their company's debts and financial losses.. In other words, investors' and owners' private assets are not at risk if the company fails.	C

11.	Any price below the equilibrium price will lead to A. increase in supply B. excess demand C. equality of demand and supply D. decreases in demand Show Content Detailed Solution Any price below the equilibrium price will lead to excess demand with decrease in supply. This is so because, people generally buy more of a commodity when the price is low while suppliers will want to supply more when the price is high. Hence, for a price set below equilibrium, suppliers will cut back on producing more of that commodity while demand will be high.	B
12.	The allocation of goods and services in a free market economy is performed by A. the price system B. the banking system C. the central planning body D. government budgets Show Content Detailed Solution In a free market economy, the price mechanism regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.	A
13.	Given the demand function Qd = 20 - ^1/ ₂P. What is Qd when P is $12? A. 6 units B. 10 nits C. 12 units D. 14 units	D
14.	If a particular consumer derives total utility of 22 utils having consumed 4 units of a given product, his average utility will be A. 88 utils B. 18 utils C. 5.5 utils D. 3.5 utils Show Content Detailed Solution Average utility will be the total utility derived form the consumption of a commodity divided by the number of units consumed. Thus we have; 22 ÷ 4 = 5.5 utils	C
15.	The law of diminishing marginal utility applies to a A. firm which minimizes cost B. consumer who maximizes satisfaction C. producer who maximizes marginal product D. consumer who minimizes total utility Show Content Detailed Solution The law of diminishing marginal utility states that the marginal utility of a good or service declines as its consumption increases. This means that, as a consumer keeps consuming additional units of a commodity, the additional satisfaction derived will keep decreasing (goods become less valuable as you continue consuming more of it)	B

16.	Why is the law of diminishing returns a short run phenomenon? A. all inputs are fixed B. all inputs are variable C. some outputs are variable D. some inputs are variable Show Content Detailed Solution The law of diminishing returns states that as an increasing amount of a variable factor is added to a fixed factor, the marginal product of the variable factor may at first rise but must eventually fall. The law of diminishing returns applies in the short run because only then is some factor fixed.	A
17.	Which of the following is capable of increasing the population of a country? A. increase in birth rate B. increase in death rate C. poor medical facilities D. decrease in birth rate Show Content Detailed Solution Birth rate is the proportion of births to the total population in a place in a given time. That is, the amount of babies born and alive in a given period of time. An increase in the birth rate would cause the population of that geographical area to increase.	A
18.	In the firm's production process, marginal cost A. falls continuously throughout B. falls and later rises C. remains unchanged throughout D. rises and later falls Show Content Detailed Solution Marginal cost is the cost additional cost incurred by producing one additional unit of a product or service. In the production process, the cost would usually rise and the fall in the long run when the firm starts enjoying economies of scale. That is, higher outputs, minimal cost	D
19.	If a firm's price is less than average cost but more than part of variable cost, the firm is covering A. all of its fixed cost and variable cost B. all of its fixed cost and part of variable cost C. all of its variable cost and part of fixed cost D. part of its fixed cost and part of varible cost	A
20.	An arrangement in which the debts of a company can only be paid from its own assets implies A. unlimited liability B. transferred liability C. limited liability D. capital liability Show Content Detailed Solution Limited liability is a kind of legal protection whereby owners and shareholders have no personal responsibility for their company's debts and financial losses.. In other words, investors' and owners' private assets are not at risk if the company fails.	C