Theory of Demand and Supply Generix Content - Theory of Demand and Supply
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JAMB questions for "Economics :: Theory of Demand and Supply"
Q1
If the demand for a good is more elastic than its supply, the tax burden is borne
A
equally by consumers and producers
B
more by consumers
C
more by producers
D
more by retailers and producers
E
Q2
If the price of a commodity with elastic demand increases, the revenue accruing to the producer will
A
double
B
be constant
C
increase
D
decrease
E
Q3
An excess demand for beans will result from
A
an increase in the price of beans
B
a decrease in the price of beans
C
an increase in the supply of beans
D
an decrease in the supply of beans
E
Q4
Consumer surplus tends to be higher when demand is
A
perfectly elastic
B
inelastic
C
elastic
D
unitarily elastic
E
Q5
A set of factors that can shift the supply curve are changes
A
weather, price and technology
B
technology, price and taste
C
technology, weather and population
D
population, price and taste
E
Q6
If the coefficient of price elasticity of supply is greater than one, the supply is said to be
A
perfectly elastic
B
infinitely inelastic
C
fairly inelastic
D
fairly elastic
E
Q7
If commodity X is a by-product of commodity Y, this implies that both commodities are
A
in competitive supply
B
jointly supplied
C
in composite supply
D
in excess supply
E
Q8
An industry's supply curve is more likely to be elastic when firms are
A
enjoying free entry and exit
B
operating below capacity
C
operating at full capacity
D
maximizing profits
E
Q9
A movement along the same demand curve is caused by the
A
price of the product
B
price of other products
C
income of the consumer
D
taste of the consumer
E
Q10
The demand curve for a luxury good is
A
negatively sloped
B
parallel to the price axis
C
parallel to the quantity axis
D
positively sloped
E
Q11
Price elasticity of demand is expressed as
A
Percentage change in price/ percentage change in quantity demanded
B
Percentage change in quantity demanded/percentage change in income
C
Percentage change in income/percentage change in quantity demanded
D
percentage change in quantity demanded/percentage change in price
E
Q12
A supply curve is positively sloped because
A
supply always exceeds demand
B
demand always exceeds supply
C
price is an incentive to consumers
D
price is an incentive to producers
E
Q13
The short-run supply curve for medical doctors is more likely to be
A
perfectly elastic
B
perfectly inelastic
C
fairly inelastic
D
fairly elastic
E
Q14
If the price of an item changes by 8% and quantity supplied changes from 600 units to 660 units, the price elasticity of supply is
A
0.80
B
1.25
C
2.00
D
10.00
E
Q15
A decrease in supply without a corresponding change in demand will lead to
A
an increase in equilibrium price and a decrease in equilibrium quantity
B
an decrease in equilibrium price and a increase in equilibrium quantity
C
an decrease in equilibrium price and equilibrium quantity
D
an increase in equilibrium price and quantity
E
Q16
A major determinant of the demand for a luxury good is
A
the price of the good
B
the price of other goods
C
the income of consumers
D
taste and fashion
E
Q17
if 100 units and 120 units of commodity X are supplied at N80 at different times, it means that there is
A
a change in supply
B
a change in the quantity supplied
C
an increase in the quantity supplied
D
a decrease in the quantity supplied
E
Q18
If income rises from N2000 to N4000 and quantity demanded increases from 80 units to 120 units, find the income elasticity of demand
A
0.5
B
1.2
C
2.5
D
4.0
E
Q19
If the demand elasticity coefficient of cars is 0.5, it implies that the demand for petrol is
A
elastic
B
perfectly inelastic
C
inelastic
D
perfectly elastic
E
Q20
An upward movement along the same supply curve results in
A
an increase in supply
B
a decrease in supply
C
a decrease in quantity supplied
D
an increase in quantity supplied
E
Q21
Determine the equilibrium quantity
A
14.2
B
16.8
C
20.8
D
30.2
E
Q22
If price is increased to N3, how much is the excess supply?
A
30
B
22
C
12
D
8
E
Q23
One of factors affecting the supply of manufactured good is
A
weather
B
technology
C
consumer tastes
D
availability of inputs
E
Q24
In the diagram above, there is an excess
A
demand for 30 units
B
supply for 40 units
C
demand for 20 units
D
supply for 20 units
E
Q25
A firm operating at full capacity will have a
A
fairly elastic supply curve
B
perfectly inelastic supply curve
C
fairly inelastic supply curve
D
perfectly elastic supply curve
E
Q26
A commodity is described as inferior when the
A
substitution effect is positive
B
income effect is negative
C
income effect is positive
D
substitution effect is negative
E
Q27
The major determinant of cross elasticity of demand is the
A
closeness of the substitutes
B
price of the good
C
degree of necessity of the good
D
level of income of consumers
E
Q28

If P = 1/2 (Qs + 15), what is the quantity supplied at N 9.00?

A

3.0

B

33.0

C

1.5

D

12.0

E
Q29
The coefficient of the price elasticity of supply is always
A
negative
B
zero
C
positive
D
consistent
E
Q30
When the demand for a good increases owing to an increase in income, it means that
A
demand has exceeded supply
B
there is an increase in demand
C
inflation has taken place
D
there is an increase in quantity demanded
E
Q31
When a firm's average revenue curve is downward-sloping, its price elasticity of demand will be
A
between zero and infinity
B
zero
C
one
D
greater than one
E
Q32

The diagram above shows the effect of

A

excess supply over demand at q2

B

excess demand over supply at q3

C

maximum price legislation at P2

D

minimum price legislation at P2

E
Q33
A commodity will be demanded only if
A
it has no close substitute
B
it has utility
C
consumers' income increases
D
the price is low
E
Q34
Derived demand is normally used with reference to
A
the factor of production
B
superior goods
C
the cost of production
D
inferior goods
E
Q35
An important determinant of price elasticity of demand
A
government policy
B
the ease of substitution
C
the prices of other commodities
D
the state of technology
E
Q36
Given the demand and price remain unchanged, an outward shift of supply curve will lead to
A
excess supply
B
hoarding
C
a black market
D
excess demand
E
Q37

The law of demand can be expressed as

A

Qd = f(1/P)

B

P = f(Qd )

C

Qd  = f(P)

D

P = f (1/Qd)

E
Q38
If elasticity of demand is greater than 1 and less than infinity, demand is said to be
A
elastic
B
perfectly inelastic
C
inelastic
D
perfectly elastic
E
Q39
An inverse relationship between price and quantity demanded implies that
A
the two variables change in the opposite directions
B
the two variables change in the same direction
C
only one variable changes
D
the two variables remain unchanged
E
Q40
The hoarding of goods is usually experienced when
A
supply is greater than demand
B
the market price is above the equilibrium price
C
demand is grater than supply
D
excess demand is greater than excess supply
E
Q41
An increase in the quantity supplied of a commodity suggests
A
a leftward shift of the supply curve
B
a rightward shift of the supply curve
C
a movement along the supply curve
D
an increase in elasticity of supply
E
Q42
A profit-maximizing monopolist should produce within the range where his demand is
A
inelastic
B
elastic
C
infinitely elastic
D
unitarily elastic
E
Q43
Given that Y = C+I and C=bY where b=0.8, what is the multiplier?
A
4
B
2
C
10
D
5
E
Q44
When there is a change from T to N, it implies that
A
quantity supplied has increased
B
quantity demanded has increased
C
price has fallen
D
supply has increased
E
Q45

The diagram below shows the shift in both demand and supply curves. What is the new equilibrium point after the shifts?

A

E2

B

E4

C

E1

D

E3

E
Q46
If an increase in the price of good X leads to an increase in the supply of good Y, X and Y are said to be
A
composite
B
jointly supplied
C
competitive
D
jointly demanded
E
Q47
A movement from M to T implies that there has been
A
a decrease in supply
B
an increase in price
C
a decrease in price
D
an increase in demand
E
Q48
A change in demand for a normal good means
A
a movement along a given demand curve
B
the demand changes as price changes
C
a change in the price elasticity
D
a shift in the demand curve
E
Q49
Price elasticity of supply is a ratio of the change in
A
original quantity to a change in new quantity
B
quantity supplied to the change in price
C
price to the change in quantity supplied
D
quantity supplied to the change in demand
E
Q50
A normal supply curve is usually positively sloped because the relationship between
A
price and supply is positive
B
demand and price is positive
C
supply and price is negative
D
price and demand is negative
E
Q51
If the demand curve facing a firm is sharply downward-sloping, the firm is likely to be
A
a monopolistic competitor as it can have a limited influence on price
B
a monopolist as it can have great influence on price
C
a perfect competitor as it cannot influence the market price
D
an oligopolist as it can collude with other firm to have some influence on price
E
Q52
If there is an increase in demand without a corresponding increase in supply, there will be a
A
rise in price
B
shift in demand curve to the left
C
fall in price
D
shift in supply curve to the left
E
Q53
The price of a good rises from N5 to N8 and the quantity demanded falls from 200 to 190 units over this price range, the demand curve is
A
perfectly inelastic
B
fairly inelastic
C
perfectly elastic
D
fairly elastic
E
Q54
For an inferior good, a decrease in real income will lead to
A
a lower equilibrium price
B
a change in quantity demanded
C
an outward shift of the demand curve
D
an inward shift of the demand curve
E
Q55
The solution to the problem of double coincidence of wants requires a buyer and a seller whose demands are precisely
A
complementary
B
supplementary
C
composite
D
competitive
E
Q56
In the diagram below, what is the excess demand at the price of N60?
A
300
B
100
C
600
D
200
E
Q57
The effect of an increase in demand for a commodity accompanied by a decrease in supply will be to
A
decrease the equilibrium quantity and effect the price in an indeterminate way
B
raise the price of the commodity and affect the quantity in an indeterminate way
C
lower its price while affecting the equilibrium quantity in an indeterminate way
D
raise the price as well as the equilibrium quantity
E
Q58
The demand for factors of production is an example of
A
competitive demand
B
derived demand
C
composite demand
D
joint demand
E
Q59
In the diagram below, the marginal rate of substitution of X for Y for a movement from S to T is
A
5:1
B
1:5
C
18:4
D
13:3
E
Q60
A shift in supply curve indicates that a different quantity will be supplied at each possible price because
A
supply is facing competition
B
consumers are willing to pay higher prices
C
price has changed
D
other factors than price have changed
E