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.
Increasing returns to scale suggests that
A firm can make a profit by reducing output
A firm can make more profit by increasing output
As the producer reduces the quantity of raw materials used, the marginal product will double
As the producer increases the quantity of raw materials used, the marginal product will fall
Correct answer is B
Increasing returns to scale is when the output increases in a greater proportion than the increase in input.
A large firm may experience diseconomies of scale if there is
Difficulty in coordinating decisions
Division of labour in production
Employment of more specialist
Decrease in the cost of production
Correct answer is A
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.
If a beef market is in equilibrium at $4.00 per kg, an increase in price to $6.00 per kg may cause
Surplus in the market
Shortage in the market
Black market to come into operation
Rationing to be introduced
Correct answer is A
When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.
2.00
1.50
1.00
0.50
Correct answer is A
The price elasticity of supply = % change in quantity supplied / % change in price
% change in quantity supplied = 250 - 200 = 50
50/200 x 100 = 25
Therefore, price elasticity of supply = 25/12.5 = 2
An increase in supply means that
More is sold at different prices
More is sold at the same price
There is a leftward shift of the supply curve
There is a movement along the supply curve
Correct answer is B
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.