NECO Economics Past Questions & Answers - Page 39

191.

Of what importance is a wholesaler in the chain of distribution?

A.

Creation of artificial scarcity

B.

Bulk breaking

C.

Formation of trade unionism

D.

Hoarding of goods

E.

Making prompt payment to producers

Correct answer is B

No explanation has been provided for this answer.

192.

In a free market economy, wages are determined by

A.

The employees

B.

The employers

C.

Trade unions

D.

Interaction of demand and supply forces

E.

The government

Correct answer is D

No explanation has been provided for this answer.

193.

Which of the following is NOT a reason for the absence of an industry in the rural areas?

A.

Absence of financial institution

B.

Restricted market

C.

Inadequate power and water supply

D.

Inadequate transportation

E.

Presence of external economies

Correct answer is E

External economies of scale are business-enhancing factors that happen outside a company but within the same industry. It has to do with the availability of skilled labor, banking facilities, transportation, communication, etc within a company.

Option E  is the correct option because rural areas lack most of the things that make up a company's external economies of scale.

194.

The law of variable proportion state that if the quantities of variable factor of production are used with fixed factor, after a certain point,

A.

Each successive unit of the variable factor brings about a decreasing marginal product

B.

Each successive unit of the variable factor bring about equal increase in marginal product

C.

Each successive unit of the variable factor bring about an increasing marginal product

D.

Each successive unit of the variable factor bring about four time increase in marginal product

E.

Each successive unit of the variable factor bring about more than equal increase in marginal product

Correct answer is B

No explanation has been provided for this answer.

195.

An economic system where both the public and individuals own and control means of production is known as ……… system

A.

Capitalism

B.

Communist

C.

Mixed

D.

Socialist

E.

Welfarism

Correct answer is C

No explanation has been provided for this answer.