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

A major function of the price mechanism is that it determines the _______ (WASSCE 2008)

A. allocation of resources.
B. amount of national savings.
C. population of the country.
D. number of goods to be taxed

Equilibrium price is the price at which quantity _______ (WASSCE 2010)

A. demanded is greater than quantity supplied.
B. supplied is greater than quantity demanded.
C. demanded is equal to quantity supplied.
D. supplied equals quantity produced.

Price fixed above the equilibrium is to ______ (WASSCE 2011)

A. protect agricultural producers.
B. discourage agricultural producers.
C. lower the prices of agricultural produce.
D. favour consumers.