2014 - WAEC Economics Past Questions and Answers - page 3

The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs, whereas, in the short run, firms are only able to influence prices through adjustments made to production levels

The long-run average cost (LRAC) curve shows the firm's lowest cost per unit at each level of output, assuming that all factors of production are variable. The LRAC curve assumes that the firm has chosen the optimal factor mix, as described in the previous section, for producing any level of output.

Marketing Co-operatives: They are voluntary associations of producers formed with the objective of ensuring a steady market for the output of members. Marketing Co-operatives are especially suitable for marketing of agricultural products.

standard of deferred payment is a function of money. It is the function of being a widely accepted way to value a debt, thereby allowing goods and services to be acquired now and paid for in the future. For it to serve this purpose, it has to be able to retain its value overtime.

'Nominal' value of national income can be found by multiplying the quantity of output by the retail (market) price of this output. INcrease in the level of production, will increase the norminal value of national income which is the monetary value of outputs. But If demand increases at an unsustainable rate, resources become increasingly scarce, and firms will raise prices.

Cyclical unemployment is unemployment that results when the overall demand for goods and services in an economy cannot support full employment. Cyclical unemployment is when workers lose their jobs because of downturns in the business cycle.

Inflation is the persistent increase in the prices of goods and services over time.

In a perfectly competitive market, there are many buyers and many sellers. In fact, the number of buyers and sellers is effectively infinite. This alows for the free flow of information in the market

The price elasticity of supply = % change in quantity supplied / % change in price. When calculating the price elasticity of supply, economists determine whether the quantity supplied of a good is elastic or inelastic.

change in price = 10 - 15 = 5
change in quantity = 10 - 15 = 5
5 ÷ 5 = 1