Economics, 2020, WASSCE/WAEC MAY/JUNE, Exam, Paper 1 | Objectives

Paper Info

Year :

2020

Title :

Economics

Exam :

WASSCE/WAEC MAY/JUNE

Paper 1 | Objectives

11 - 20 of 49 Questions

#	Question	Ans
11.	Goods that are abundant in supply usually have low A. total utility B. marginal utility C. average utility D. time utility	B
12.	If an increase in the price of crude oil led to an increase in the prices of kerosene and grease, then kerosene and grease are in A. joint supply B. competitive supply C. market Supply D. composite supply Show Content Detailed Solution Joint supply occurs when a product or the process of producing a product can yield two or more outputs. For instance, cows can be used for both milk or beef, If the supply of cows increases, it will also lead to an increase in the supply of dairy and beef products.	A
13.	If an increase in the supply of beef increased the supply of hides, then beef and hides are in A. competitive supply B. joint supply. C. composite supply D. joint demand Show Content Detailed Solution Joint supply refers to a product that can end up being transformed into at least two other types of goods. for instance, hides are a natural by-product of meat production and are gotten from livestock. An increase in the supply of beef will automatically lead to an increase in the production and supply of hides.	B
14.	An increase in supply means that A. more is sold at different prices B. more is sold at the same price C. there is a leftward shift of the supply curve D. there is a movement along the supply curve Show Content Detailed Solution An increase in supply refers to the rise in the supply of a good or service at the same price or a rightward shift in the supply curve. This means that producers plan to sell more of the goods at each possible price.	B
15.	A seller increased the quantity he offered for sale from 200 units to 250 units when the price of his product increased by 12.5%. What is the price elasticity of the supply of his product? A. 2.00 B. 1.50 C. 1.00 D. 0.50 Show Content Detailed Solution The price elasticity of supply = % change in quantity supplied / % change in price % change in quantity supplied = 250 - 200 = 50 \(\frac{50}{200}\) x 100 = 25 Therefore, price elasticity of supply = \(\frac{25}{12.5}\) = 2	A
16.	If a beef market is in equilibrium at $4.00 per kg, an increase in price to $6.00 per kg may cause A. surplus in the market B. shortage in the in market C. black market to come into operation D. rationing to be introduced Show Content Detailed Solution When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.	A
17.	A large firm may experience diseconomies of scale if there is A. difficulty in coordinating decisions B. division of labor in production C. employment of more specialist D. decrease in the cost of production Show Content Detailed Solution Diseconomies of scale occur when a firm or business grows so big that the costs per unit of output increase. If the firm becomes so large that it can no longer efficiently coordinate production activities, it will most likely experience diseconomies of scale.	A
18.	Increasing returns to scale suggests that A. a firm can make a profit by reducing output B. a firm can make more profit by increasing output C. as the producer reduces the quantity of raw materials used, the marginal product will double D. as the producer increases the quantity of raw materials used, the marginal product will fall Show Content Detailed Solution Increasing returns to scale is when the output increases in a greater proportion than the increase in input.	B
19.	One feature of the average fixed cost is that it A. falls continuously but is never equal to zero. B. is U-shaped and intersects the Y-axis C. rises and falls faster than the marginal cost D. is always higher than the average variable cost Show Content Detailed Solution The average cost curve keeps falling as the level of output rises. It remains positive, and never reaches a zero value, and never turns negative.	A
20.	If the average fixed cost (AFC) of producing 5 bags of rice is $20.00, the average fixed cost of producing 10 bags will be A. $2.00 B. $4.00 C. $10.00 D. $20.00 Show Content Detailed Solution Average fixed cost decreases as the number of output increases. Hence, if a firm spent $20 to produce 5 bags of rice, when it increases the output level to 10 bags of rice the cost will not change because it is a fixed cost, but rather, the same amount of fixed costs will be spread over a larger number of units of output. Hence, the $20 cost that was used to produce 5 bags of rice, will accommodate the new level of output. If 5 bags were produced at $20 Then 10 bags will also be produced at $20 cost Hence we have \(\frac{20}{10}\) = 2 $2 is the average fixed cost per unit of producing 10 bags	A

11.	Goods that are abundant in supply usually have low A. total utility B. marginal utility C. average utility D. time utility	B
12.	If an increase in the price of crude oil led to an increase in the prices of kerosene and grease, then kerosene and grease are in A. joint supply B. competitive supply C. market Supply D. composite supply Show Content Detailed Solution Joint supply occurs when a product or the process of producing a product can yield two or more outputs. For instance, cows can be used for both milk or beef, If the supply of cows increases, it will also lead to an increase in the supply of dairy and beef products.	A
13.	If an increase in the supply of beef increased the supply of hides, then beef and hides are in A. competitive supply B. joint supply. C. composite supply D. joint demand Show Content Detailed Solution Joint supply refers to a product that can end up being transformed into at least two other types of goods. for instance, hides are a natural by-product of meat production and are gotten from livestock. An increase in the supply of beef will automatically lead to an increase in the production and supply of hides.	B
14.	An increase in supply means that A. more is sold at different prices B. more is sold at the same price C. there is a leftward shift of the supply curve D. there is a movement along the supply curve Show Content Detailed Solution An increase in supply refers to the rise in the supply of a good or service at the same price or a rightward shift in the supply curve. This means that producers plan to sell more of the goods at each possible price.	B
15.	A seller increased the quantity he offered for sale from 200 units to 250 units when the price of his product increased by 12.5%. What is the price elasticity of the supply of his product? A. 2.00 B. 1.50 C. 1.00 D. 0.50 Show Content Detailed Solution The price elasticity of supply = % change in quantity supplied / % change in price % change in quantity supplied = 250 - 200 = 50 \(\frac{50}{200}\) x 100 = 25 Therefore, price elasticity of supply = \(\frac{25}{12.5}\) = 2	A

16.	If a beef market is in equilibrium at $4.00 per kg, an increase in price to $6.00 per kg may cause A. surplus in the market B. shortage in the in market C. black market to come into operation D. rationing to be introduced Show Content Detailed Solution When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.	A
17.	A large firm may experience diseconomies of scale if there is A. difficulty in coordinating decisions B. division of labor in production C. employment of more specialist D. decrease in the cost of production Show Content Detailed Solution Diseconomies of scale occur when a firm or business grows so big that the costs per unit of output increase. If the firm becomes so large that it can no longer efficiently coordinate production activities, it will most likely experience diseconomies of scale.	A
18.	Increasing returns to scale suggests that A. a firm can make a profit by reducing output B. a firm can make more profit by increasing output C. as the producer reduces the quantity of raw materials used, the marginal product will double D. as the producer increases the quantity of raw materials used, the marginal product will fall Show Content Detailed Solution Increasing returns to scale is when the output increases in a greater proportion than the increase in input.	B
19.	One feature of the average fixed cost is that it A. falls continuously but is never equal to zero. B. is U-shaped and intersects the Y-axis C. rises and falls faster than the marginal cost D. is always higher than the average variable cost Show Content Detailed Solution The average cost curve keeps falling as the level of output rises. It remains positive, and never reaches a zero value, and never turns negative.	A
20.	If the average fixed cost (AFC) of producing 5 bags of rice is $20.00, the average fixed cost of producing 10 bags will be A. $2.00 B. $4.00 C. $10.00 D. $20.00 Show Content Detailed Solution Average fixed cost decreases as the number of output increases. Hence, if a firm spent $20 to produce 5 bags of rice, when it increases the output level to 10 bags of rice the cost will not change because it is a fixed cost, but rather, the same amount of fixed costs will be spread over a larger number of units of output. Hence, the $20 cost that was used to produce 5 bags of rice, will accommodate the new level of output. If 5 bags were produced at $20 Then 10 bags will also be produced at $20 cost Hence we have \(\frac{20}{10}\) = 2 $2 is the average fixed cost per unit of producing 10 bags	A