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

Demand for inferior goods is an example of ________ (WASSCE 2004)

A. expansion of demand
B. contraction of demand
C. individual demand
D. abnormal demand.

At what prices does the market exhibit excess supply?

A. 7,8,9      B. 6,7,8      C. 8,9,10      D. 5,6,7

Which of the following will shift the demand curve for cocoa to the right? (WASSCE 2013)

A. An increase in consumers’ income.
B. A rise in the price of cocoa.
C. A tax on cocoa producers.
D. A fall in the quantity demanded of cocoa.

The graph below is the market demand and supply schedule for yam


What is the equilibrium price?

A. N10      B. N15      C. N20      D. N25

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