Economics Practice Test – Theory of Price Determination (Questions with Answers and Explanations)

One of the factors determining price elasticity of demand for a commodity is the ______ (WASSCE 2005)

A. availability of close substitutes.
B. number of producers.
C. government policy.
D. price of other commodities.

If in the short-run commodity X and commodity Y are supply jointly, which of the following is correct _______ (WASSCE 2009)

A. An increase in demand for X will increase supply of Y
B. An increase in demand for X will leave the supply of Y unchanged
C. An increase in demand for Y will raise the price of X
D. An increase in demand for X will cause less of Y to be produced.

An increase in the supply of a commodity X automatically results in an increase in the supply of another commodity Y. This is a case of ______ (WASSCE 2013)

A. elastic supply.      B. joint supply.      C. exceptional supply.      D. competitive supply

The graph below is the market demand and supply schedule for yam


What is the equilibrium price?

A. N10      B. N15      C. N20      D. N25

If a fall in price of one commodity leads to an increase in the supply of another commodity, both commodities have ______ (WASSCE 2009)

A. composite supply      B. joint supply      C. competitive supply      D. short run supply