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.
The figure above shows the change in demand for Commodity X which is a normal good. Use it to answer the question that follows.
Which of the following caused the change in demand from D\(_{1}\) D\(_{1}\) to D\(_{2}\)D\(_{2}\)
Fall in the income of consumers
Rise in the price of a substitute
Rise in the price of a complement
Fall in the supply of commodity
Correct answer is B
No explanation has been provided for this answer.
The table below shows the total revenue schedule of a firm. Use the information to answer the question that follows
| Output (units) | 50 | 60 | 70 | 80 | 90 |
| Total revenue (TR) $ | 85 | 102 | 119 | 136 | 153 |
What is the firm's marginal revenue?
$153.00
$17.00
$1.70
$0.80
Correct answer is C
Marginal revenue = the change in total revenue divided by the change in total output quantity.
MR = \(\frac{17}{10}\) = $1.7
The table below shows the total revenue schedule of a firm. Use the information to answer the question that follows
| Output (units) | 50 | 60 | 70 | 80 | 90 |
| Total revenue (TR) $ | 85 | 102 | 119 | 136 | 153 |
What is the unit price of the firm's output?
$10.00
$2.70
$2.00
$1.70
Correct answer is D
No explanation has been provided for this answer.
$2.00
$4.00
$10.00
$20.00
Correct answer is C
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
TFC = AVC x Q
$20 x 5 bags x = $100
AVC = \(\frac{TFC}{Q}\)
AVC for 10 bags =
\(\frac{100}{10}\) = $10.00
One feature of the average fixed cost is that it
Falls continuously but is never equal to zero
Is U-shaped and intersects the Y-axis
Rises and falls faster than the marginal cost
Is always higher than the average variable cost
Correct answer is A
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.