Economics Questions and Answers

Industries are sometimes located in areas which are not profitable so as to even-out development. This is a government policy that aims to reduce regional disparities in economic development.

By locating industries in less developed areas, the government hopes to create jobs and boost economic growth in these areas. This can help to reduce poverty and improve the standard of living in these areas.

The supply of light could be met using a candle, lantern, and gas lamp is an example of joint supply. This is because the three products are produced together and cannot be produced separately.

In joint supply, two or more products are produced from the same input. The products are said to be jointly supplied because they are produced simultaneously and cannot be produced separately.

For example, in the case of the supply of light, the three products are candles, lanterns, and gas lamps. These products are produced from the same input, which is fuel. The products cannot be produced separately because they all require fuel to be produced.

A monopolist may enjoy abnormal profit only if its price exceeds average total cost. This is because a monopolist is the only producer in the market, and they can therefore set the price of their product. If the price exceeds average total cost, the monopolist will be making a profit.

If the government stops subsidy on cocoa production, the supply curve of cocoa will shift to the left. This is because the subsidy was making it cheaper to produce cocoa, so when the subsidy is removed, the cost of production will increase. As a result, fewer cocoa beans will be supplied at any given price.

The demand for a factor input as a result of the demand for its output is known as derived demand. This is because the demand for the factor input is derived from the demand for the final product that the factor input is used to produce.

For example, the demand for labor is derived from the demand for goods and services that are produced by labor. If the demand for goods and services increases, then the demand for labor will also increase.

Non-renewable natural resources are those that cannot be replaced once they are used up. Coal is a fossil fuel that is formed from the remains of plants and animals that lived millions of years ago. It takes millions of years to form coal, so it is a non-renewable resource.

Mono-product economy ( an economy that produces one product or commodity) is not a characteristics of developing country. The characteristics are: high level of illiteracy, dependence on agriculture, low savings and investment, low standard of living, population explosion, high death rate etc.

The Marginal Utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. It can be calculated by subtracting the total utility of the previous consumption from the total utility of the current consumption. In this case, the total utility of consuming 2 oranges is 16 and the total utility of consuming 1 orange is 9. Therefore, the marginal utility (X) of the second orange is 16 - 9 = 7.

Economics is regarded as a science because it uses scientific methods to build theories that can help explain behaviour of individuals, groups and organisations.

Investment multiplier (K) is a function of two factors; The MPS and MPC. If MPC is high, K will also be high but if MPC is low, K will also be low. on the other hand, If MPS is high, K will be low and if MPS is low, K will be high ( since there is an inverse relationship between MPS and K).