JAMB Economics Past Questions & Answers - Page 78

386.

Cost - push inflation occurs when_______

A.

Production cost is high

B.

Government embarks on deficits financing

C.

Factors decrease

D.

There is too much in circulation

Correct answer is A

Cost push inflation occurs when increase in cost of production are passed on to consumers in the form of high price for the goods and services on sale. The price of goods are pushed up by rising costs.

387.

Goods sold in perfectly competitive markets are generally

A.

Homogenous

B.

Intermediate and final

C.

Durable and non-durable

D.

Heterogeneous

Correct answer is A

The goods bought and sold in a perfect market must be homogeneous. That is, they must be identical. They must be of same size, shape, weight, colour etc. The goods must be the same in the eye of the customer.

388.

The graph above shows

A.

A decrease in quantity supplied

B.

An increase in supply

C.

A decrease in supply

D.

An increase in quantity

Correct answer is D

From the graph above, there is a direct relationship between price and quantity supplied. As the price goes up, the quantity supplied also rises. But as price falls, so too does quantity supplied. When the price was P1, the supplier was willing to supply only one unit of his product. When the price increased to P2, the supply also increased.

The graph represents a “normal” supply curve, showing that as price changes, it brought about a change to quantity supplied.

389.

The equilibrium price clears the market; it is the price at which__________

A.

Everything is sold

B.

Buyers spend all their money

C.

Excess demand is zero

D.

None of the above

Correct answer is C

Equilibrium price is the price where the demand for a product or a service is equal to the supply of the product or service. At equilibrium, both consumers and producers are satisfied, thereby keeping the price of the product or the service stable.

390.

Which of the following statement is TRUE about ECOWAS?

A.

The aim of ECOWAS is to ensure economic stability

B.

Bigger state in the community dominate the small state

C.

Members of the ECOWAS community can form cartel and create monopolies

D.

English is the only official language of ECOWAS

Correct answer is A

The Economic Community of West African States (ECOWAS) is a regional organization of 15 West African countries established on 28 May 1975. Its main goal is the promotion of the economic integration among its members. Indeed, ECOWAS is one the five regional pillars of the African Economic Community (AEC).