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All questions of The Theory of Supply for JAMB Exam
Supply schedules illustrate the relationship between:- a)Price and quantity demanded
- b)Price and quantity supplied
- c)Income and price elasticity
- d)Demand and supply
Correct answer is option 'B'. Can you explain this answer?
Supply schedules illustrate the relationship between:
a)
Price and quantity demanded
b)
Price and quantity supplied
c)
Income and price elasticity
d)
Demand and supply
|
Deepak Iyer answered |
Supply schedules illustrate the relationship between price and quantity supplied.
When supply is perfectly elastic, the elasticity coefficient is:- a)Zero
- b)Less than 1
- c)Equal to 1
- d)Greater than 1
Correct answer is option 'D'. Can you explain this answer?
When supply is perfectly elastic, the elasticity coefficient is:
a)
Zero
b)
Less than 1
c)
Equal to 1
d)
Greater than 1
|
|
Deepak Iyer answered |
When supply is perfectly elastic, it means that even a small change in price leads to an infinite change in quantity supplied. In this case, the elasticity coefficient is greater than 1, indicating an extremely responsive supply.
When an increase in the price of one good leads to a decrease in the supply of another good, it is an example of:- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'D'. Can you explain this answer?
When an increase in the price of one good leads to a decrease in the supply of another good, it is an example of:
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
When an increase in the price of one good leads to a decrease in the supply of another good, it indicates a competitive relationship between the two goods. Therefore, the correct answer is A) Competitive supply. This relationship implies that the goods are substitutes, and changes in the price of one affect the supply of the other.
When an increase in the price of one good leads to an increase in the supply of another good, it is an example of:- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'D'. Can you explain this answer?
When an increase in the price of one good leads to an increase in the supply of another good, it is an example of:
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
When an increase in the price of one good results in an increase in the supply of another good, it signifies a complementary relationship between the two goods. This type of supply is known as complementary supply. For instance, if the price of coffee rises, the supply of creamer may also increase as people tend to consume more coffee with creamer.
Which type of supply occurs when goods are produced and supplied by different producers who compete against each other?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'A'. Can you explain this answer?
Which type of supply occurs when goods are produced and supplied by different producers who compete against each other?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
Competitive supply refers to the situation where different producers produce and supply similar goods, competing against each other in the market. These goods are substitutes, and an increase in the supply of one good may lead to a decrease in the supply of another as producers allocate resources accordingly to meet market demands.
Cross elasticity of supply measures the responsiveness of quantity supplied to a change in:- a)Price of a complementary good
- b)Price of a substitute good
- c)Income of consumers
- d)Advertising expenditure
Correct answer is option 'B'. Can you explain this answer?
Cross elasticity of supply measures the responsiveness of quantity supplied to a change in:
a)
Price of a complementary good
b)
Price of a substitute good
c)
Income of consumers
d)
Advertising expenditure
|
|
Deepak Iyer answered |
Cross elasticity of supply measures how the quantity supplied of one good responds to changes in the price of a substitute good. It helps understand the relationship between the supply of different products in the market.
If the price of good X increases, causing the supply of good Y to increase, what type of relationship exists between X and Y?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'B'. Can you explain this answer?
If the price of good X increases, causing the supply of good Y to increase, what type of relationship exists between X and Y?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
When an increase in the price of one good leads to an increase in the supply of another good, it signifies a composite relationship between the two goods. Therefore, the correct answer is B) Composite supply. This relationship implies that the goods are used together, and changes in the price of one affect the supply of the other.
Which of the following represents a change in quantity supplied?- a)A decrease in the price of raw materials
- b)An increase in the number of producers in the market
- c)An increase in production costs
- d)An increase in the price of the product
Correct answer is option 'D'. Can you explain this answer?
Which of the following represents a change in quantity supplied?
a)
A decrease in the price of raw materials
b)
An increase in the number of producers in the market
c)
An increase in production costs
d)
An increase in the price of the product
|
|
Deepak Iyer answered |
A change in quantity supplied refers to a movement along the supply curve due to a change in price.
If the price of product X increases, causing the supply of product Y to decrease, what type of relationship exists between X and Y?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'D'. Can you explain this answer?
If the price of product X increases, causing the supply of product Y to decrease, what type of relationship exists between X and Y?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
When an increase in the price of one good leads to a decrease in the supply of another good, it signifies a complementary relationship between the two goods. Therefore, the correct answer is D) Complementary supply. This relationship implies that the goods are used together, and changes in the price of one affect the supply of the other.
The price elasticity of supply tends to be greater in the long run because:- a)Producers have more time to adjust their production levels
- b)Producers are more responsive to price changes in the long run
- c)There are fewer production constraints in the long run
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
The price elasticity of supply tends to be greater in the long run because:
a)
Producers have more time to adjust their production levels
b)
Producers are more responsive to price changes in the long run
c)
There are fewer production constraints in the long run
d)
All of the above
|
|
Deepak Iyer answered |
The price elasticity of supply is generally higher in the long run. Producers have more time to adjust their production levels, they become more responsive to price changes, and there are fewer production constraints. These factors contribute to a higher elasticity of supply in the long run.
If the cross elasticity of supply for two goods is negative, it suggests that they are:- a)Complementary goods
- b)Substitute goods
- c)Inferior goods
- d)Unrelated goods
Correct answer is option 'A'. Can you explain this answer?
If the cross elasticity of supply for two goods is negative, it suggests that they are:
a)
Complementary goods
b)
Substitute goods
c)
Inferior goods
d)
Unrelated goods
|
|
Deepak Iyer answered |
If the cross elasticity of supply for two goods is negative, it indicates that they are complementary goods. Complementary goods are typically consumed together, and a decrease in the price of one leads to an increase in the supply of the other.
Which of the following factors can cause a change in supply?- a)Change in consumer income
- b)Change in consumer tastes and preferences
- c)Change in production costs
- d)Change in population
Correct answer is option 'C'. Can you explain this answer?
Which of the following factors can cause a change in supply?
a)
Change in consumer income
b)
Change in consumer tastes and preferences
c)
Change in production costs
d)
Change in population
|
|
Deepak Iyer answered |
Factors such as changes in production costs can cause a change in supply.
The upward-sloping supply curve shows that:- a)As price increases, quantity supplied decreases
- b)As price increases, quantity supplied increases
- c)As price decreases, quantity supplied decreases
- d)As price decreases, quantity supplied increases
Correct answer is option 'B'. Can you explain this answer?
The upward-sloping supply curve shows that:
a)
As price increases, quantity supplied decreases
b)
As price increases, quantity supplied increases
c)
As price decreases, quantity supplied decreases
d)
As price decreases, quantity supplied increases
|
|
Deepak Iyer answered |
The upward-sloping supply curve shows that as price increases, quantity supplied increases.
The formula for calculating the price elasticity of supply is:- a)Percentage change in quantity supplied / Percentage change in price
- b)Percentage change in price / Percentage change in quantity supplied
- c)Price / Quantity supplied
- d)Quantity supplied / Price
Correct answer is option 'B'. Can you explain this answer?
The formula for calculating the price elasticity of supply is:
a)
Percentage change in quantity supplied / Percentage change in price
b)
Percentage change in price / Percentage change in quantity supplied
c)
Price / Quantity supplied
d)
Quantity supplied / Price
|
|
Deepak Iyer answered |
The price elasticity of supply is calculated by dividing the percentage change in price by the percentage change in quantity supplied. This formula helps measure the responsiveness of supply to changes in price.
Which of the following is not a determinant of supply?- a)Production costs
- b)Technology
- c)Consumer preferences
- d)Government regulations
Correct answer is option 'C'. Can you explain this answer?
Which of the following is not a determinant of supply?
a)
Production costs
b)
Technology
c)
Consumer preferences
d)
Government regulations
|
|
Deepak Iyer answered |
Consumer preferences are not determinants of supply. The determinants of supply include production costs, technology, and government regulations.
If the supply curve shifts to the left, it indicates:- a)An increase in supply
- b)A decrease in supply
- c)An increase in demand
- d)A decrease in demand
Correct answer is option 'B'. Can you explain this answer?
If the supply curve shifts to the left, it indicates:
a)
An increase in supply
b)
A decrease in supply
c)
An increase in demand
d)
A decrease in demand
|
|
Deepak Iyer answered |
If the supply curve shifts to the left, it indicates a decrease in supply.
Which of the following is a determinant of supply elasticity?- a)Price of the product
- b)Availability of substitutes
- c)Production technology
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is a determinant of supply elasticity?
a)
Price of the product
b)
Availability of substitutes
c)
Production technology
d)
All of the above
|
|
Deepak Iyer answered |
The determinants of supply elasticity include the price of the product, availability of substitutes, and production technology. These factors affect the responsiveness of quantity supplied to changes in price.
Inelastic supply implies that the:- a)Percentage change in quantity supplied is greater than the percentage change in price.
- b)Percentage change in quantity supplied is equal to the percentage change in price.
- c)Percentage change in quantity supplied is less than the percentage change in price.
- d)Supply curve is vertical.
Correct answer is option 'C'. Can you explain this answer?
Inelastic supply implies that the:
a)
Percentage change in quantity supplied is greater than the percentage change in price.
b)
Percentage change in quantity supplied is equal to the percentage change in price.
c)
Percentage change in quantity supplied is less than the percentage change in price.
d)
Supply curve is vertical.
|
|
Deepak Iyer answered |
Inelastic supply means that the quantity supplied is not very responsive to changes in price. The percentage change in quantity supplied is smaller than the percentage change in price.
Which of the following is an example of a non-price determinant of supply?- a)Change in consumer income
- b)Change in the price of the product
- c)Change in the number of producers
- d)Change in consumer tastes and preferences
Correct answer is option 'D'. Can you explain this answer?
Which of the following is an example of a non-price determinant of supply?
a)
Change in consumer income
b)
Change in the price of the product
c)
Change in the number of producers
d)
Change in consumer tastes and preferences
|
|
Deepak Iyer answered |
Consumer income is an example of a non-price determinant of demand, not supply.
Which type of supply occurs when two or more goods are supplied together as a package and are consumed together?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'C'. Can you explain this answer?
Which type of supply occurs when two or more goods are supplied together as a package and are consumed together?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
Joint supply refers to the simultaneous supply of two or more goods that are produced together and consumed together. These goods are interrelated and cannot be easily separated. For example, milk and cheese or crude oil and gasoline are considered joint supply goods.
In which type of supply are goods considered substitutes for one another?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'A'. Can you explain this answer?
In which type of supply are goods considered substitutes for one another?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
Competitive supply occurs when different goods are considered substitutes for one another. In this case, an increase in the supply of one good leads to a decrease in the supply of another. For instance, if the price of butter increases, suppliers may switch to producing margarine instead, resulting in a decrease in the supply of butter.
Which of the following best defines supply?- a)The quantity of goods and services that consumers are willing and able to purchase at a given price.
- b)The quantity of goods and services that producers are willing and able to sell at a given price.
- c)The price at which consumers are willing to purchase goods and services.
- d)The price at which producers are willing to sell goods and services.
Correct answer is option 'B'. Can you explain this answer?
Which of the following best defines supply?
a)
The quantity of goods and services that consumers are willing and able to purchase at a given price.
b)
The quantity of goods and services that producers are willing and able to sell at a given price.
c)
The price at which consumers are willing to purchase goods and services.
d)
The price at which producers are willing to sell goods and services.
|
|
Deepak Iyer answered |
Supply refers to the quantity of goods and services that producers are willing and able to sell at a given price.
A supply schedule shows that as the price of a good increases:- a)Producers are willing to supply more of the good
- b)Producers are willing to supply less of the good
- c)Demand for the good increases
- d)Demand for the good decreases
Correct answer is option 'A'. Can you explain this answer?
A supply schedule shows that as the price of a good increases:
a)
Producers are willing to supply more of the good
b)
Producers are willing to supply less of the good
c)
Demand for the good increases
d)
Demand for the good decreases
|
|
Deepak Iyer answered |
A supply schedule shows that as the price of a good increases, producers are willing to supply more of the good.
When supply is perfectly inelastic, the elasticity coefficient is:- a)Zero
- b)Less than 1
- c)Equal to 1
- d)Infinite
Correct answer is option 'A'. Can you explain this answer?
When supply is perfectly inelastic, the elasticity coefficient is:
a)
Zero
b)
Less than 1
c)
Equal to 1
d)
Infinite
|
|
Deepak Iyer answered |
When supply is perfectly inelastic, it means that the quantity supplied does not change regardless of the price. In this case, the elasticity coefficient is zero, indicating no responsiveness of supply to price changes.
A decrease in supply can be caused by:- a)Technological advancements
- b)Decreased input costs
- c)Increase in the number of producers
- d)Increase in taxes or regulations
Correct answer is option 'D'. Can you explain this answer?
A decrease in supply can be caused by:
a)
Technological advancements
b)
Decreased input costs
c)
Increase in the number of producers
d)
Increase in taxes or regulations
|
|
Deepak Iyer answered |
A decrease in supply can be caused by an increase in taxes or regulations.
Two goods, X and Y, are supplied together in fixed proportions. This is an example of:- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'C'. Can you explain this answer?
Two goods, X and Y, are supplied together in fixed proportions. This is an example of:
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
When two goods, X and Y, are supplied together in fixed proportions, it represents a joint supply. These goods are produced using the same inputs and are typically consumed together. An example of joint supply can be seen in the production of beef and leather, where both goods are obtained from cattle.
In which type of supply are goods produced using a common factor of production?- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'C'. Can you explain this answer?
In which type of supply are goods produced using a common factor of production?
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
Joint supply occurs when goods are produced using a common factor of production. In this type of supply, two or more goods are produced together because they require the same resources or inputs. For example, wool and mutton are joint supply goods produced from sheep.
When goods are supplied together and are used in combination to satisfy a particular want, it is known as:- a)Competitive supply
- b)Composite supply
- c)Joint supply
- d)Complementary supply
Correct answer is option 'B'. Can you explain this answer?
When goods are supplied together and are used in combination to satisfy a particular want, it is known as:
a)
Competitive supply
b)
Composite supply
c)
Joint supply
d)
Complementary supply
|
|
Deepak Iyer answered |
Composite supply refers to the situation where goods are supplied together and are used in combination to satisfy a specific want or need. These goods are interdependent and cannot be easily separated. An example of composite supply is the supply of cars and gasoline, as cars require gasoline to function.
Which of the following is an example of a product with inelastic supply?- a)Crude oil
- b)Fast food
- c)Movie tickets
- d)Fashion clothing
Correct answer is option 'A'. Can you explain this answer?
Which of the following is an example of a product with inelastic supply?
a)
Crude oil
b)
Fast food
c)
Movie tickets
d)
Fashion clothing
|
|
Deepak Iyer answered |
Crude oil is often considered an example of a product with inelastic supply. This is because it takes significant time and resources to increase oil production, making the quantity supplied less responsive to changes in price.
If the price elasticity of supply for a product is 1.5, it is considered:- a)Perfectly inelastic
- b)Inelastic
- c)Unit elastic
- d)Elastic
Correct answer is option 'D'. Can you explain this answer?
If the price elasticity of supply for a product is 1.5, it is considered:
a)
Perfectly inelastic
b)
Inelastic
c)
Unit elastic
d)
Elastic
|
|
Deepak Iyer answered |
If the price elasticity of supply is greater than 1, it indicates that supply is elastic. This means that the percentage change in quantity supplied is greater than the percentage change in price, showing a relatively responsive supply to price changes.
Chapter doubts & questions for The Theory of Supply - Economics for JAMB 2025 is part of JAMB exam preparation. The chapters have been prepared according to the JAMB exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for JAMB 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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