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

The lower the price of a commodity, the greater the quantity demanded. This is based on the assumption that consumers' _________ (WASSCE 2007)

A. income is diminished
B. income remains the same
C. utility is diminished
D. population is high.

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.

Which of the following determinants of supply cannot be predicted easily? (WASSCE 2008)

A. Price of the commodity
B. New techniques of production
C. National emergencies
D. Mobility of labour

The type of demand that exists between torchlight and battery is _______ (WASSCE 2009)

A. competitive demand      B. complementary demand      C. composite demand      D. independent demand.

Which of the following determinants of supply cannot be predicted easily? (WASSCE 2008)

A. Price of the commodity
B. New techniques of production
C. National emergencies D. Mobility of labour