By buying treasury bills, the Central Bank of Nigeria intends to
- A. increase money supply in the economy
- B. reduce the cash reserve ratio for banks
- C. reduce money supply in the economy
- D. increase the capital base of commercial banks
The function of money which makes division of labour possible is its
- A. unit of account
- B. store of value
- C. medium of exchange
- D. standard of deferred payment
If MPC is 0.7 while government expenditure increased by N 150m, the equilibrium national income is
- A. N 214 million
- B. N 45 million
- C. N 105 million
- D. N 500 million
A decrease in aggregate spending in an economy will ultimately lead to
- A. boom
- B. inflation
- C. deflation
- D. recession
In national income accounting, tax is determined by the
- A. level of income
- B. level of consumption
- C. level of investment
- D. rate of savings
An agreement among firms on price and segmentation is termed
- A. cartel
- B. collusion
- C. haggling
- D. specialization
The demand curve for factors of production
- A. is perfect elastic
- B. slopes upwards
- C. slopes of downwards
- D. is perfectly inelastic
One of the characteristics of monopolistic competition is that
- A. there is mobility of factors of production
- B. no single seller dominates the market
- C. the firms are price-takers
- D. consumers have perfect knowledge of price
An industry’s supply curve is more likely to be elastic when firms are
- A. enjoying free entry and exit
- B. operating at full capacity
- C. operating below capacity
- D. maximizing profits
The rising portion of the long-run average cost curve of a firm is an indication that it is experiencing
- A. increasing efficiency
- B. economies of scale
- C. diseconomies of scale
- D. increasing marginal returns
A firm enjoying economies of scale is said to be
- A. reducing average cost as production increases
- B. benefiting from the activities of other firms
- C. maximizing profits as production increases
- D. having an upward-sloping average cost curve
Average product is less than marginal product when
- A. there is constant returns to scale
- B. there is increasing returns to scale
- C. there is decreasing returns to scale
- D. diminishing returns set in
In order to reduce hardship faced by consumers due to high prices government can introduce
- A. maximum prices
- B. commodity boards
- C. minimum prices
- D. price control boards
In perfect competition,price is determined by the
- A. government
- B. sellers
- C. buyers
- D. market
If commodity X is a by-product of commodity Y , this implies that both commodities are
- A. in competitive supply
- B. in composite supply
- C. jointly supplied
- D. in excess supply
If the coefficient of price elasticity of supply is greater than one, the supply is said to be
- A. perfectly elastic
- B. fairly inelastic
- C. infinitely inelastic
- D. fairly elastic
A set of factors that can shift the supply curve are changes in
- A. weather, price and technology
- B. technology, weather and population
- C. technology, price and taste
- D. population, price and taste
If a consumer plans to spend 120k on four oranges but spent 80k, his consumer surplus is
- A. N1.50
- B. N0.40
- C. N1.00
- D. N2.00
The law of diminishing marginal utility explains why
- A. the slope of a normal demand curve is negative
- B. an abnormal demand curve slopes upwards
- C. the slope of a normal demand curve is positive
- D. the consumption of inferior goods increases with income
One of the assumptions of ordinal utility theory is that
- A. choice is not consistent
- B. utility can be ranked
- C. total utility is a function of price
- D. satisfaction is measurable
Consumer surplus tends to be higher when demand is
- A. inelastic
- B. perfectly elastic
- C. elastic
- D. unitarily elastic