WAEC Economics Past Questions & Answers - Page 90

446.

Increase in supply due to changes in plant size will take place only in the

A.

Normal time

B.

Long time

C.

Market period

D.

Short run

Correct answer is B

The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs, whereas, in the short run, firms are only able to influence prices through adjustments made to production levels.

447.

The supply of tea is linearly presented as p = 0 . 2Q, where P is the price and Q is the quantity. What is P when Q = 25?

A.

$0.08

B.

$5.00

C.

$25.02

D.

$125

Correct answer is D

No explanation has been provided for this answer.

448.

The rate of increase in utility is

A.

Average utility

B.

Increasing utility

C.

Total utility

D.

Marginal utility

Correct answer is D

In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a goods or service is the change in the utility from an increase or decrease in the consumption of that good or service.

449.

The profit of a producer is the difference between

A.

Total cost and marginal cost

B.

Total revenue and total cost

C.

Average cost and total cost

D.

Price and total cost

Correct answer is B

Total profit is determined by subtracting total costs from revenues. Total revenue is determined by multiplying the price received for each unit sold by the number of units sold.

450.

If the coefficient of price elasticity of demand is 0.1, demand is

A.

Elastic

B.

Inelastic

C.

Zero elastic

D.

Unitary elastic

Correct answer is B

The numerical values for the PED coefficient could range from zero to infinity. In general, the demand for a good is said to be inelastic (or relatively inelastic) when the PED is less than one (in absolute value): that is, changes in price have a less than proportional effect on the quantity of the good demanded.