Economies of scale
Specialization
Division of labour
Diseconomies of scale
Correct answer is A
Economies of scale is a proportionate saving in costs gained by an increased level of production. This means that, a firm begin to enjoy certain benefits such as a reduction in its direct and overhead cost as its scale of transaction and operation expands.
Curve I
Curve II
Curve III
Curve IV
Curves l and lll
Correct answer is D
No explanation has been provided for this answer.
In Nigeria, the government can reduce the cost of accommodation by fixing the rent
At the prevailing rate
At the equilibrium price
Above the equilibrium price
Below the equilibrium price
Correct answer is D
The government can reduce the cost of accommodation by fixing the rent at a maximum price. Maximum prices occur when a government sets a legal limit on the price of a good or service – with the aim of reducing prices below the market equilibrium price.
Governments try to control the rate charged for rent by keeping the cost of renting below a certain level. However,
setting the price below equilibrium maximum will cause a shortage – demand will be greater than supply.
One of the criticisms of the price mechanism is that
Producers are sovereign
It provides low degree of freedom
It widens the inequitable gap
Consumers are sovereign
Correct answer is A
Price mechanism refers to the system where the forces of demand and supply determine the prices of commodities. This means that, prices are left in the fate of market forces negating the concept of consumer sovereignty.
Consumers are forced to purchase those goods which producers want. Thus, the producer is sovereign, not the consumer.
If the price of a commodity is fixed below equilibrium, this will lead to
Excess demand
A decrease in price
An increase in price
Excess supply
Correct answer is A
Just like the law of demand, the higher the price, the lower the quantity demanded and the lower the price the higher the quantity demanded. When the prices of goods are set below equilibrium, it will invariably lead to high demand for the product.
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