JAMB Economics Past Questions & Answers - Page 254

1,266.

The fixing of the price of an item above or below the equilibrium price is most likely to take place in a

A.

Centrally planned economy

B.

Free market economy

C.

Developed economy

D.

Mixed economy

Correct answer is B

In a free-market economy, the concept of price ceiling and price floor come to play. In this kind of market situation, the government can introduce laws to ensure that prices do not rise or fall beyond a particular amount.

1,267.

In a demand curve, the relationship between price and quantity is

A.

Indeterminate

B.

Direct

C.

Nil

D.

Inverse

Correct answer is D

A demand curve shows the relationship between quantity demanded and price.

The price of a good is inversely related to the quantity demanded in the sense that, the higher the price, the lower the demand, and the lower the price, the higher the demand. 

1,268.

A vertical supply curve indicates that

A.

The quantity supplied is responsive to price

B.

The same fixed quantity will be supplied no matter the price

C.

An increase in price will result in an increase in the quantity supplied

D.

There is a fixed price for the commodity below which no supply will be made

Correct answer is B

No explanation has been provided for this answer.

1,269.

A major problem facing all economies is how to

A.

Increase consumption of imported goods

B.

Improve trade among nations

C.

Transform from a developing to a developed economy

D.

Allocate scarce resources

Correct answer is D

No explanation has been provided for this answer.

1,270.

When a generalization is made based on observed facts, it is known as

A.

Deductive reasoning

B.

Inductive reasoning

C.

Theoretical reasoning

D.

Normative reasoning

Correct answer is B

Inductive reasoning is a process by which a person makes a generalization based on specific, individual experiences. The process begins with observation. A person collects data through the five senses, then analyzes the gathered information to draw a general conclusion that may be applied to other situations. It is the most basic form of reasoning in existence.