WAEC Economics Past Questions & Answers - Page 32

156.

If an increase in the price of crude oil led to an increase in the prices of kerosene and grease, then kerosene and grease are in

A.

Joint supply

B.

Competitive supply

C.

Market Supply

D.

Composite supply

Correct answer is A

Joint supply occurs when a product or the process of producing a product can yield two or more outputs. For instance, cows can be used for both milk or beef, If the supply of cows increases, it will also lead to an increase in the supply of dairy and beef products.

157.

Goods that are abundant in supply usually have low

A.

Total utility

B.

Marginal utility

C.

Average utility

D.

Time utility

Correct answer is B

No explanation has been provided for this answer.

158.

A consumer is in equilibrium when

A.

His market Supply is equal to his market demand

B.

He maximizes his satisfaction from spending his income

C.

The market is also in equilibrium

D.

He has consumed all he wants

Correct answer is B

A consumer is in equilibrium when he derives maximum satisfaction from the goods, given his income and the market prices.

159.

Goods are described as inferior if their demand

A.

Decreases as price falls

B.

Increases as income rises

C.

Decreases as income increases

D.

Increases as price increases

Correct answer is C

In economics, an inferior good is a good whose demand drops when people's incomes rise. 

160.

In a free market economy, resources are allocated through the 

A.

Government department

B.

Price mechanisms

C.

Trade union

D.

State planning committee

Correct answer is B

In a free market economy, the allocation of resources and distribution of goods and services are made on the basis of the relative market price known as the price mechanism.