2017 - WAEC Economics Past Questions and Answers - page 2

In economics, effective demand (ED) in a market is the demand for a product or service which occurs when purchasers are constrained in a different market. it is the Quantity of a good or service that consumers are actually buying at the current market price. 

It refers to how the amount supplied of a good or service changes in response to a price or factor change. 

Factors that Influence the PES. There are numerous factors that impact the price elasticity of supply including the number of producers, spare capacity, ease of switching, ease of storage, length of production period, time period of training, factor mobility, and how costs react.

An increase in supply is illustrated by a shift of the supply curve to the right. An increase in supply can be caused by: an increase in the number of producers. a decrease in the costs of production (such as higher prices for oil, labor, or other factors of production).

A consumer is rational if he decides for the option that maximizes his/her utility. When studying the bachelor for Economics, in microeconomics class, the teacher would always tell you that it is assumed that consumers are rational, meaning that they maximize their profits based on their utility payoffs.

A parallel market arises when the government limits the amount of foreign exchange that can be bought or sold for particular transactions, causing excess demand or supply to spill over into a parallel market, or authorizes that exchange rates for certain transactions be pegged and for other transactions be floating 

Market-clearing price is another term used interchangeably with equilibrium price. Equilibrium price is a common economics term that refers to the exactprice at which market supply equals market demand.

Internal economies of scale are related to the shift in average production costs for a business as it boosts its overall product output and the average cost per unit falls until maximum efficiency is attained. This means that, the overall production cost decreases, while output increases

The division of labour is the separation of tasks in any system so that participants may specialize. Individuals, organizations, and nations are endowed with or acquire specialized capabilities and either form combinations or trade to take advantage of the capabilities of others in addition to their own. Division of labour leads to specialization where people can concentrate on task they perform better than others.

Workers will require less training to be an efficient worker. Therefore this will lead to an increase in labour productivity and firms will be able to benefit from economies of scale (lower average costs with increased output) and increased efficiency. workers specialising in a repetitive job is an Examples of specialisation and division of labour

Total Revenue (TR) is calculated by multiplying the quantity of goods sold (Q) by the price of the goods (P). For example if you sold 120 pens for 2$ each: To find your Profit: You will have to subtract the Total Cost (TC) from your Total Revenue(TR).

Profit Recall that we defined a firm s short-run total costs as: Total Cost = TFC + TVC. Now we can define economic profit: Profit = Total Revenue - Total Cost

Total revenue in economics refers to the total receipts/ income from sales of a given quantity of goods or services. It is the total income of a business and is calculated by multiplying the quantity of goods sold by the price of the goods.