Economics Questions and Answers
Economics questions and answers to help you prepare for JAMB, WAEC, NECO, Post UTME and job aptitude tests or interviews.
Economics questions and answers to help you prepare for JAMB, WAEC, NECO, Post UTME and job aptitude tests or interviews.
A firm's average cost decreases in the long-run because of
Increasing returns to scale
Diminishing average returns
Decreasing marginal returns
Decreasing average fixed cost
Correct answer is A
A firm's average cost decreases in the long-run because of the law of increasing returns to scale. Law of increasing returns to scale shows that as output increases, the average cost fall. The law is applied to the long run analysis of production.
A price floor is usually fixed
At the equilibrium and causes no shortage
Above the equilibrium and causes shortage
Below the equilibrium and causes surpluses
Above the equilibrium and causes surpluses
Correct answer is D
Price floor or minimum price legislation is when price is fixed above the equilibrium. When the government fix the price above the equilibrium, there will be excess supply over demand and there will be surplus.
If the marginal utility of commodity is equal to its price, then
The consumer is in equilibrium
More of the commodity can be consumed
Total utility is also equal to its price
The market is not in equilibrium
Correct answer is A
A consumer is in equilibrium when the marginal utility of a commodity is equal to its price if only one commodity is consumed i.e MU x=Px where :
MU = Marginal utility
P= Price of the commodity
x = The commodity
A supply curve parallel to the X-axis indicates
Fairly elastic supply
Infinitely elastic supply
Fairly inelastic supply
Perfectly inelastic supply
Correct answer is B
Infinitely elastic supply curve is parallel to the x-axis i.e at a fixed price, there is change in quantity supplied. es = ∞
Palm oil and palm kernel are in
Joint supply
Competitive demand
Competitive supply
Complementary demand
Correct answer is A
Joint supply is the supply of two or more commodities from the same source or origin e.g palm oil and palm kernel are supply from the same palm tree.