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JAMB questions for "Economics :: The Theory of Price Determination"
Q1
In perfect competition, price is determined by the
A
government
B
buyers
C
sellers
D
market
E
Q2
In order to reduce hardship faced by consumers due to high prices, government can introduce
A
maximum prices
B
minimum prices
C
commodity boards
D
price control boards
E
Q3
An agreement among firms on price and segmentation is termed
A
cartel
B
haggling
C
collusion
D
specialization
E
Q4
In a regulated market, price is determined by
A
consumers
B
producers
C
auction
D
government
E
Q5
The price index is calculated as
A
base year price/current price x 100/1
B
weighted price/ current price x 100/1
C
current price/base year price x 100/1
D
current price/weighted price x 100/1
E
Q6
The short-run inelasticity of supply of agricultural produce causes
A
stability in prices
B
a steady rise in prices
C
a steady decline in prices
D
instability in prices
E
Q7
Given that Y = C + 1, where C = 50 + 0.75 and I = N45m, what is the equilibrium level of income?
A
N380m
B
N20m
C
N180m
D
N200m
E
Q8
If government fixes price below the equilibrium price, what effect will it have on demand?
A
Quantity demanded and supplied will be equal
B
Quantity supplied will be greater than quantity demanded
C
Quantity demanded will increase
D
Quantity demanded will decrease
E
Q9
What is the equilibrium price?
A
N100
B
N110
C
N60
D
N80
E
Q10
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
E
Q11
In a free market economy, the price system allocates resources
A
under government's directives
B
to ensure general welfare
C
to their best alternative uses
D
to reduce poverty
E
Q12
A persistent rise in the general level of price implies
A
an increase in some price
B
a one-time rise in prices
C
that the higher the price level, the more the value of money
D
a steady fall in the purchasing power of money
E
Q13
The main function of price in the economic system is to
A
allocate scarce resources among competing users
B
ensure equitable distribution of income and wealth
C
determine the demand for and the supply of goods and services
D
remove all the constraints on production of goods and services
E
Q14

In the diagram below, the price P2 in price control situation, is referred to as

A

minimum price

B

mark-up price

C

maximum price

D

mark-down price

E
Q15
The main function of the price system is to
A
distribute resources equally among competing ends
B
ensure efficient allocation of resources in the economic system
C
allocate goods and services equally
D
minimize cheating
E
Q16
The price mechanism is more effective in achieving efficient performance of the economy than the planning mechanism because of the
A
role of supply and demand
B
role of material incentive
C
existence of buyers and sellers
D
role of money
E
Q17

If in the graph beside, it is assumed that the price is initially P1, it can be deduced that price will

A

fall because there is surplus

B

remain constant because is the equilibrium price

C

rise because there its a shortage

D

double

E
Q18
The long-run equilibrium price and quantity for the firm are representively
A
OP,OY
B
OR,OX
C
OH,OX
D
OQ,OZ
E
Q19

Which of the following statements must hold if price discrimination is to be possible?

A

Elasticities in the various markets must not differ

B

The seller must recognise the possibility of resale

C

The markets must not be seperated but integrated

D

The market should be separable and there should be no resale

E
Q20
In equilibrium, injections are equal to
A
withdrawals
B
surplus of imports over exports
C
government spending
D
wages
E
Q21
Which of the following changes in equilibrium price and quantity is as a result of an upward shift in the market demand for a commodity?
A
Both the price and quantity fall
B
The price rises and the quantity falls
C
The price falls and the quantity rises
D
Both the price and the quantity rise
E
Q22
Price leadership is
A
term of tacit price rigidity
B
used to explain price rigidity
C
illegal in Nigeria
D
a form of overt collusion
E
Q23
In the process of shopping, Mr. X whose salary per month does not exceed N200, find that the price of a commodity he used to purchase with a fixed amount of N200 has now risen to N230. He therefore decided not to buy this commodity at all. Mr X is thus affected by the
A
substitution effect of a price change
B
income effect of a price change
C
opportunity cost of a price change
D
inflation effect of a price change
E
Q24
Price can be defined as
A
a rate of exchange
B
a medium of exchange
C
the cost of a product
D
the standard of accounting
E
Q25
given an original price N3.50 per kilogram of rice and a change in price of N1.40m and given the quantity purchased at the price as a 10kg and a change in quantity as 5kg after the price change, the elasticity is equal to
A
10.20
B
3.57
C
1.25
D
0.80
E
Q26
In the diagram beside, PS is the supply curve for a particular commodity, while OP is the price. Which of the following statements is correct?
A
The quantity supplied is infinitely elastic
B
When price is zero, the quantity supplied is infinite
C
When price is infinite, the quantity supplied is zero
D
The quantity supplied is indefinite
E
Q27
the main function of price mechanism is to
A
limit consumer demand
B
enable producers make profits
C
allocated scarce resources among competing ends
D
ensure consumer sovereignty
E
Q28
what is the market equilibrium price?
A
N5.00
B
N8.00
C
N9.00
D
N7.00
E
N6.00
Q29
The control price for a carton of beer in Nigeria is N7.20. But a carton of beer is sold in parts of the country for as much as N15.00. The cause of this exorbitant price is that
A
there is a Government ban on the important of beer
B
beer distributor want more profit
C
Nigeria is a large country
D
middlemen hoard beer
E
the demand for beer exceeds the supply
Q30

In the diagram, which of the following is NOT likely to be a factor causing the change from S1 and S2?

A

An imposition of a unit tax on maize

B

A decrease in the supply of labour

C

An increase in the price of other inputs

D

An increase in the price of maize

E

Unfavourable weather conditions

Q31
An equilibrium price
A
keeps excess demand within limits
B
keeps excess supply within limits
C
generates the greatest possible demand and supply
D
generates the greatest possible profits
E
equates the quantity supplied to be equal to the quantity demanded
Q32

Price control indicates the following

A

price is fixed at equilibrium level

B

price is fixed above equilibrium level

C

price is not fixed but is determined by supply and demand

D

price is fixed below equilibrium level

E

none of the above

Q33
Which of the following is a correct definition of equilibrium price?
A
price which covers production cost
B
A price which maximizes entrepreneurs profits
C
A price at which the quantity demanded equals quantity supplied
D
A price at which a competitive firm is at equilibrium
E
A price which stabilizes farmers' income
Q34

The price mechanism

A

regulates supply and demand

B

rations the consumers

C

rewards the producers 

D

allocates scarce resoucres

E

does all of the above

Q35

In the diagram, equilibrium price is

A

P2

B

P0

C

P1

D

indeterminate

E

between Po and Pv

Q36
Price Control cannot work in Nigeria because
A
the population is too large
B
the policemen hate to arrest people
C
while it is fairly easy to control the producers and the importing firms, the small distributors and too many things are produced in the country
D
control work under a military rule
E
too many things are produced in the country