24 reviewed questions with answers and explanations.
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An economy in which both the public and private sectors contribute to economic growth is known as a
D: mixed economy
A mixed economy combines private enterprise with public-sector participation. Both sectors therefore contribute to production and economic activity.
AI-reviewed · source checkedIf the standard deviation of a given data is 53, what is the variance?
B: 2,809
Variance is the square of the standard deviation. Squaring 53 gives 53 × 53 = 2,809, expressed in squared units of the original variable.
AI-reviewed · source checkedFind the median of 35, 10, 14, 38, 15, 18, 22, 30 and 28.
D: 22
Putting the nine observations in order gives 10, 14, 15, 18, 22, 28, 30, 35, 38. The fifth observation is the middle value, so the median is 22.
AI-reviewed · source checkedAn increase in demand without a corresponding change in supply will lead to
B: an increase in equilibrium price and quantity
With the usual upward-sloping supply curve unchanged, an outward demand shift moves the market intersection to a higher price and larger traded quantity.
AI-reviewed · source checkedAn increase in the price of a commodity will result in
A: a decrease in the quantity demanded
For a normal downward-sloping demand curve, a higher own price reduces the quantity consumers are willing to buy. This is a change in quantity demanded, not a shift of demand.
AI-reviewed · source checkedIf the price of a bicycle falls from N120 to N80 and quantity bought rises from 300 to 500 units, calculate the magnitude of price elasticity using the initial values as percentage bases.
D: 2.0
Using initial values, quantity rises by 200/300 while price falls by 40/120. Dividing the percentage changes gives elasticity magnitude (200/300)/(40/120) = 2.
AI-reviewed · source checkedA demand graph has price on the vertical axis and quantity on the horizontal axis. The demand curve D is a vertical line rising from the fixed quantity Q. What is its price elasticity of demand?
C: perfectly inelastic
A vertical demand curve keeps quantity fixed at Q while price changes. The quantity response is zero, so price elasticity of demand is zero, or perfectly inelastic.
AI-reviewed · source checkedUtility is the satisfaction derived from the
B: use of goods and services
Utility means the satisfaction obtained by consuming or using goods and services. Producing or distributing them makes consumption possible but is not the definition of consumer utility.
AI-reviewed · source checkedIf P = (Qs + 10)/4, what is the quantity supplied when P = N14?
C: 46
Substitute P = 14 into P = (Qs + 10)/4. Multiplying by 4 gives 56 = Qs + 10, so Qs = 46.
AI-reviewed · source checkedIf the supply of a product is elastic, a small reduction in price will
B: reduce the quantity supplied
Along an upward-sloping elastic supply curve, reducing price reduces quantity supplied. Elasticity means the percentage quantity response exceeds the percentage price change.
AI-reviewed · source checkedIf the price of a commodity is fixed below equilibrium, this will lead to
A: excess demand
A binding price ceiling below equilibrium raises quantity demanded and lowers quantity supplied relative to equilibrium. The resulting shortage is excess demand.
AI-reviewed · source checkedOne of the criticisms of the price mechanism is that
C: it widens the inequitable gap
Market demand reflects purchasing power as well as need. A price mechanism can therefore allocate more goods to those with higher incomes and preserve or widen unequal outcomes.
AI-reviewed · source checkedIn Nigeria, government can reduce the cost of accommodation by fixing rent
D: below the equilibrium price
A rent ceiling below the equilibrium rent lowers the permitted rent for covered accommodation. Such a binding ceiling may also create shortages, so lower legal rent does not guarantee availability.
AI-reviewed · source checkedIf a refinery achieves a reduction in cost by purchasing and transporting crude oil in large quantities, it enjoys
A: economies of scale
Buying and transporting larger quantities can spread costs and obtain bulk savings. A fall in average cost as operations expand is an economy of scale.
AI-reviewed · source checkedAn isoquant lying above to the right of another represents
A: a higher output level
Under the standard productive-input assumption, an isoquant farther from the origin represents combinations producing more output. Higher isoquants therefore correspond to higher output levels.
AI-reviewed · source checkedThe speculative demand for money is inversely related to the
A: interest rate
In the standard liquidity-preference model, a higher interest rate increases the return forgone by holding money instead of bonds. Speculative demand for money therefore falls as the interest rate rises.
AI-reviewed · source checkedIf Mr K obtains a N50,000 loan to provide for ordinary household needs, the demand for money is said to be
A: transactionary
Money held to meet ordinary household purchases serves the transactions motive. Speculative balances are instead held in response to expected changes in financial-asset prices.
AI-reviewed · source checkedIf CBN reduces money supply, the interest rate will
B: rise
In the standard money-market model with money demand unchanged, a reduction in money supply makes liquidity scarcer. The interest rate rises to bring money demand into line with the lower supply.
AI-reviewed · source checkedAn example of an expansionary fiscal policy action is
A: decrease in the corporate profit tax rates
Reducing corporate profit taxes leaves firms with more after-tax funds and can stimulate expenditure and investment. It is a fiscal expansion; changing bank rates or buying securities is monetary policy.
AI-reviewed · source checkedLife insurance companies contribute to economic development by holding a part of their assets in
A: long-term financial instruments
Life insurers can place long-term savings into bonds and other long-term instruments. This channels funds toward investment projects whose benefits arise over several years.
AI-reviewed · source checkedThe most important determinant for the location of a brick industry is the availability of
D: raw materials
Bricks require bulky clay or similar mineral inputs. Access to suitable raw materials reduces the cost of bringing these inputs to the production site, making it a key location consideration.
AI-reviewed · source checkedThe effect of emigration on a country's population is
A: decrease in the population
Emigration means residents leave a country to live elsewhere. Other population flows unchanged, it subtracts people from that country's population.
AI-reviewed · source checkedThe rate of interest charged on loans depends largely on
C: the risk associated with the loan
Lenders normally charge a risk premium when repayment is less certain. Greater default risk therefore tends to raise the rate charged, other loan terms and market conditions equal.
AI-reviewed · source checkedIf Mr. X lost his clerical job at a store and searched for a similar job for ten months before finding one this implies that Mr. X was
B: frictionally unemployed
Frictional unemployment occurs while a worker searches and is matched with another job. Seeking a similar clerical position describes this job-search process without evidence of a skills mismatch.
AI-reviewed · source checked