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WAEC questions for "Economics :: Theory of price Determination"
Q1

When the price of a commodity increases and the quantity demanded also increases, this is a case of

A

exceptional demand

B

derived demand

C

competitive demand

D

joint demand

E
Q2

At a co-efficient of price elasticity of supply of 0.5, supply is

A

perfectly inelastic

B

inelastic

C

perfectly elastic

D

elastic

E
Q3

Government fixing of price below the equilibrium point is aimed at protecting the

A

sellers

B

industries

C

distributors 

D

consumers

E
Q4

A major function of the price mechanism is that it determines the 

A

allocation of resources

B

amount of national savings

C

population of the country

D

number of goods to be taxed

E
Q5

In normal market situation, when the price of a commodity rises, the

A

demand for the commodity will rises

B

demand for the commodity will fall

C

supply of the commodity will be constant

D

supply for the commodity will fall

E
Q6

When the quality of commodity supplied increases and the quantity demanded decreases there will be

A

a rise in price

B

no change in price

C

price fluctuation

D

a fall in price

E
Q7

The market price of commodity is normally determined by the

A

law of demand

B

interaction of the forces of demand and supply

C

total number of people in the market

D

total quantity of commodity in the market

E
Q8

The mechanism which allows the price of a commodity to be fixed either above or below the equilibrium is known as 

A

monopolistic competition

B

price discrimation

C

perfect competitive market

D

price control

E
Q9

To achieve an equilibrium position, the consumer must buy so much of each commodity whose price is equal to its

A

marginal utility

B

total utility

C

average utility

D

variable utility

E
Q10

Price control refers to

A

the ways of making more goods available in the market

B

a policy of ensuring stable price in the market

C

a general reduction in the price level

D

effective working of the forces of demand and supply

E
Q11

If the government fixed price of a commodity is above equilibrium price, the quantity supplied will be

A

less than quantity demanded

B

equal to the quantity demanded

C

greater than quantity demanded

D

equal tozero

E
Q12

One of the factors determining price elasticity of demand  for a commodity is the

A

availability of close substitutes

B

number of producers

C

government policy

D

price of other commodities

E
Q13

A persistent and appreciable rise in the general level of price is known as 

A

depreciation

B

inflation

C

deflation

D

production

E
Q14

When a change in price does not affect the quantity demanded of a commodity, the price elasticity of demand is

A

fairly inelastic

B

infinitely inelastic

C

perfectly inelastic 

D

unitary elastic

E
Q15

The percentage change in price is

A

10

B

20

C

30

D

40

E
Q16

A continuous fall in the general price level is called

A

recession

B

depression

C

delation

D

deflation

E
Q17

A market equilibrium exists when

A

no buyer goes home empty-handed

B

demand and supply are increasing

C

demand and supply are equal

D

the price is fluctuation

E
Q18
The changing of different prices to different groups of buyers for the same goods or services is called
A
monopolistic competition
B
price determination
C
price discrimination
D
monopoly
E
Q19
Which of the following will occur when the market is unstable?
A
Prices will fluctuate
B
Demand will remain static
C
Unemployment will surely fall
D
Prices will remain static
E
Q20
The price elasticity coefficient indicates
A
how far business can be reduce cost
B
the degree of competition
C
the extent to which demand curve shifts
D
consumer responsiveness to price changes
E
Q21
Price determination can only occur when there is
A
perfect competition
B
imperfect competition
C
a merger
D
partnership
E
Q22
At what price will a trader be ready to sell six oranges using the equation p = Aq + 2, where p is price and q is quality
A
N3.00
B
N4.00
C
N5.00
D
N6.00
E
N8.00
Q23
The equilibrium price of mangoes is N1.00. If the price falls to 50k, there will be
A
an excess demand
B
an excess supply
C
a surplus in the market
D
many sellers in the market
E
no seller in the market
Q24
The distribution of goods by the price system is distorted when
A
there is a high degree of competition among producers
B
producers and consumers operate freely
C
factor of production are mobile
D
no allowance is made from social cost and social benefits
E
there is price control measure in the system
Q25

The price system is

A

the market price of commodities

B

a market where a single price rules

C

a system of price allocation to the products of the same firm

D

a system of resource allocation through supply and demand interactions

E

a system by which the market price is determined  only through haggling

Q26

If price falls below the equilibrium

A

demand will equal supply

B

demand will be greater than supply

C

supply will be greater than demand

D

price will become indeterminate

E

quantity supplied will be zero

Q27

The equilibrium price of oranges is 50k. If for some reasons, the price rises to 60k, there will be

A

excess demand

B

excess supply

C

shortage in the market

D

many buyers in the market

E

no buyer in the market

Q28

If the price of a magarine rises substansially, the equilibrium price and quantity of butter demanded will

A

decrease

B

increase

C

remain constant

D

fluctuate

E

be inelastic

Q29

When the price of a commodity is fixed by law either below or above equilibrium, thee mechanism is known as

A

price discrimination

B

pricce control

C

perfect market

D

equilibrium price

E

market structure

Q30

The price of a system refers to the system by which

A

the government controls the prices in the economy

B

prices tend to rise to a general level

C

price allocates resources between consumer and priducer goods

D

government allocates resources to consumers and producers

E

the producers fix the price of their products

Q31

In the diagram, the equilibrium price is

A

OQ1

B

OQ0

C

P1P0

D

OP0

E
Q32

At price OP2

A

demands exceed supply

B

supply exceeds demand

C

demands equal supply

D

QO2 is the quantity supplied

E

OQ0 is the quantity demanded

Q33

What is the equilibrium price?

A

₦5.00

B

₦6.00

C

₦7.00

D

₦8.00

E

₦9.00

Q34

If the equilibrium price falls by ₦2.00, what will be the change in quantity demanded and supplied?

A

7,000 and 6,000 bags respectively

B

6,000 and 4,000 bags respectively

C

5,000 and 4,500 bags respectively

D

3,000 and 3,000 bags respectively

E

2,000 and 2,000 bags respectively

Q35

Which of the following is not an advantage of price control?

A

Control of inflation

B

Distortion of price mechanism

C

Prevention of exploitation

D

Control of producer's profit

E

Helping low income earners

Q36

Price control can be defined as the fixing by government or maximum of minimum prices of

A

luxury goods

B

inferior goods

C

imported capital goods

D

certain selected goods

E

goods consumed by low income earners